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India: ‘One97 Communications’ to recover dues from RCom

November 20, 2018
VOL III
ISSUE No. 47
November 20, 2018

 


 

India: ‘One97 Communications’ to recover dues from RCom

nclt

Source: www.nclt.gov.in

In as much as the Government has been in the consistent process of encouraging business operations in the nation, it also has the objective to create more transparent and systematic mechanism ensuring time bound manner and for maximization of the value assets. One of the major challenges faced by the modern commercial sector is the reposition of faith of the creditors who put their hard-earned investments at the fate of the success of the business transactions undertaken.

Resolution Procedure

The enforcement of the Insolvency and Bankruptcy Code, 2016 (hereinafter referred to as “IBC”) aims to balance the interests of all stakeholders by making the legal framework stronger in terms of reorganization and insolvency resolution of corporate persons. The IBC has been devised to complete the process or resolution within a period of 180 days from the date of admission of the application to initiate such process.

The insolvency resolution professional (hereinafter referred to as “IRP”), appointed under the IBC, is entrusted with the responsibilities of verification claims of all the creditors; taking into his custody or evaluate all the assets, property, effects and actionable claims of the corporate debtor; take measures to protect and preserve the same; carry on the business of the corporate debtor for its beneficial liquidation, etc.

The expeditious resolution system improves the global ranking of the country on the ‘Ease to do Business’ in the international scenario. Instilling faith the judicial authority in the aiding recovery of the lent credit, the IRP works out for opportunities to revive the company under insolvency resolution process before eventual disposal of assets to pay off its debts. The stricter provision of the IBC and their effective enforcement have made it an active vehicle in order to resolve the problem of bad loans.

The latest move…

In order to recover its unpaid dues, One 97Communications, the parent company of digital payments provider Paytm, has moved insolvency court against Reliance Telecom, a subsidiary of Reliance Communications – RCom.
[1]

Debt-laden RCom has already been in process of selling its assets in order to discharge its liabilities towards its creditors. The insolvency court – National Company Law Tribunal (hereinafter referred to as “NCLT”) may admit the application filed by One 97Communications considering the information utility or other evidence produced by them. Post the commencement of the resolution proceedings and recruitment of an appropriate IRP, the fate of the company shall be decided ascertaining that the creditors are duly paid in accordance with the provisions of IBC.

The fast-track and stringent insolvency resolution legal machinery offered by IBC safeguarding the interests of the creditors while balancing them against the chances of breathing a new life into the company which otherwise was on the verge of its end.

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[1]https://economictimes.indiatimes.com/industry/telecom/telecom-news/paytms-parent-company-moves-nclt-against-reliance-telecom-to-recover-dues/articleshow/65958401.cms 

 


 
India: IGST exemption extended for Export Oriented Units

Business

Globalization is the process of growing and evolving the business practices using advanced technologies to decipher the same across the global markets throughout the world. The Government has paved the way for entrepreneurial development of the country in order to elevate India’s status on the international scale of trading. Contributions made in the form of incentivizing business policies have facilitated the World Bank’s Ease of Doing Business global rankings for the country. Aiming at increasing the domestic production levels benefiting the Indian economy, offering employment opportunities to the working cadre and liberalization of the investment policies, the Government has been devising schemes for benefiting the corporates to house their businesses in the country.

India- the exporter

While the Government has made enormous efforts to promote commercial activities in the nation, focus has been to encourage trade overseas. Being a significant producer of various products, India exports a number of goods such as jute, tea, cotton, spices, engineering goods, refined petroleum, gems, jewellery, chemicals, agricultural products, textiles, etc.

With a view to improve and boost the exports performance of India, the Government introduced the Foreign Trade Policy (2015-2020). It also aims to help diversification of India’s export by aiding various sectors of the economy to gain global competitiveness with a view to foster exports.

Information Technology of India
The technological advancements touch all the core aspects of the modern life including communication, governance, business management, banking, advertising, entertainment, insurance, and education, medical, engineering, commercial and industrial fields. Keeping pace with the fast-moving world, India has been able to carve out its identity on the global platform in terms on information technology.

The Indian information technology sector has earned a repute in the global market favouring it to generate a handsome revenue to this account. Attributable to liberalized policies and reduced procedural hurdles a number of foreign entities are now preferring to establish their base in India.

Further benefits

The Government has extended the duration of exemption of integrated goods and services tax (hereinafter referred to as “IGST”) for export-oriented units (hereinafter referred to as “EOUs”) and software technology parks on imported goods till March 31, 2019 vide its notification dated September 26, 2018.

In its approach to support the information technology sector of the company generating high profits benefiting the country’s economy, the Government is working on an e-wallet scheme to issue expeditious refunds to exporters.

The approach of the Government to extend the exemption deadline and introduction of e-wallet scheme in respect of EOUs and software technology parks is expected to reduce the burden on the information technology sector providing them a time to acclimatize with the taxation regime which was not present earlier.

 


 

India: GST covers mineral mining rights

gst

Source: Source:
www.services.gst.gov.in

The economic growth of a nation is attributable to the availability of resources and facilities. Industrial development of a country depends chiefly on its mineral resources and their successful utilization. Minerals are a valuable natural resource being the vital raw material for infrastructure, capital goods and basic industries.

India occupies a significant position in production and export of minerals such as coal, lignite, petroleum (crude), bauxite, chromite, copper ore and concentrates, ores of iron, aluminium, magnesium and titanium besides high-grade refractories, lead and zinc concentrates, manganese ore, silver, diamond, limestone, phosphorite and gemstones.

Over the passage of time, the mineral industry of India has seen a vast improvement attributable to the achievements made in the increased quantity of fuel, metallic & non-metallic minerals with the use of latest and technologically advanced machinery along with rise in the value of metallic minerals.

Regulatory set up

While the State Governments of the country remain the owners of the minerals produced, the extraction, processing and commercialization of minerals in India is controlled and governed under the provisions of the below sated guidelines:

  • National Mineral Policy of 2008;

  • Mines and Minerals (Development and Regulation) Act of 1957 (hereinafter referred to as “Mines and Minerals Act”);

GST implication

The Haryana Authority of Advance Rulings (hereinafter referred to as “AAR”) ruled that Mineral mining rights granted by the government will be liable to the Goods and Services Tax (hereinafter referred to as “GST”) at the rate applicable on the supply of the extracted raw material.

The AAR clarified the ambiguity that persisted over the liability of the tax payment with respect to the royalty paid to secure mining license from the State Government. The issue arose as whether such amount was taxable in the hands of the licensees and in such case the rates which shall be applicable.

It was held that the mining rights granted by the Government would qualify as a service liable to tax at the rate applicable to the supply of the mineral being mined in accordance to the reverse charge mechanism requiring recipients to pay tax instead of the supplier for the services provided by the Government. The applicable rate shall be 5% which is valid on the supply of minerals.

The AAR decision is expected to ease the tax burden of the mining sector removing the confusion over the applicability of tax on the miners and the lower rates for such implication. This may result in boosting the mining activities within the nation which may further foster the economy of the country.

 


 

India: Restaurants must display Food-Safety tags

fssai

www.fssai.gov.in

India has always been a great host of multiple cuisines owing to its love for food and the desire to serve. With the food market covering a wide range of people of varying strata, the food industry in India has seen a rapid expansion and development contributing significantly to the growth of the economy of the nation.

Securing Food Safety

In order to control the operations involving commercialization of the food and its products in India, the Government enforced the Food Safety and Standards Act, 2006 (hereinafter referred to as the “Act”). The Food Safety and Standards Authority of India (hereinafter referred to as “FSSAI”) is the authority established under the Act for monitoring the effective implementation of food laws in India. It is responsible for laying down science-based standards for articles of food and to regulate their manufacture, storage, distribution, sale and import, to confirm availability of safe and wholesome food for human consumption and for the matters connected therewith or incidental thereto.

Food Safety tags by Restaurants

The FSSAI enforced its guidelines dated February 15, 2018 regarding the requirement of the restaurants to display food safety tags at prominent places in the premises. However, it was observed failure on the part of the restaurant owners to fulfil the said obligation.

In furtherance of the non-compliance to its aforesaid order, FSSAI has issued order dated September 19, 2018 that all restaurant owners shall display the Food Safety Display Boards at prominent places of the premises indicating FSSAI license number as per the prescribed format with a view to ensure adherence to the food safety norms.

The said order clarifies that display boards need to be printed and displayed at the entrance, reception or building area of every restaurant.

It has further stated that in case the restaurant owners do not abide by the orders set out by it by October 15, 2018, strict punitive actions would be imposed.

FSSAI keeps a strict eye on the operators of food business to ascertain that the standards set by the legal framework governing food safety are duly observed. Considering the vitality of food – the key element of this industry responsible for the nourishment, life and survival of mankind, the interests of the consumers is of primary importance. FSSAI provides an exhaustive framework for monitoring the quality of the food being served for the citizens of the country. The judiciary has opted for stringent measures regarding food safety whereby any violations of the standards fixed by the FSSAI challenging the safety of the consumers could also entail punitive liability under the provisions of criminal laws.

 


 

India: Penalties for violating Trade License

Gornment-of-India

Source: www.india.gov.in

Owing to significant development in the country in terms of incentivizing schemes, easy availability of resources and labour along with easier procedural formalities has made India one of the favoured destinations for business dealings. The Government has put in efforts towards the skill development and financial independence of the entrepreneurs in order to boost the economic structure of the country making it a more self-reliant production hub.

Trading in India…

Commercial transactions in India can be carried out by the entities using any of the corporate vehicles such as proprietorship, partnership, limited liability partnership, company, etc. An entity is allowed to carry out the fulfilment of its trade objectives provided the same as obtained due permission in the said regard.

Considering the nature of the business to be projects committed to be taken up, a corporate entity is required to obtain a Trade License. Issued by the local Government this license enables the entity to commence a new business. It is essential to be procured mandatorily before beginning manufacturing, exchange or storage of any activity/commodity.

The trade license certifies that the entity carrying out business operations adheres to the necessary legal requirements, safety and standard norms ensuring that no health hazard or nuisance by the conduct of trade. It ascertains the fact that no illegal or improper transactions occur in the name of trade by any entity. Valid for a period of one year this license requires renewal at annual basis.

Penalty for non-compliance

The trade license issued by the appropriate State authorities mandates obedience to the terms laid thereunder. There are various other provisions, rules, and regulations that are required to be followed by the registered entity. However, non-compliance to the same calls for penal provisions penalizing the license owner for breaking the law. Some of the penalties for contravention of the provisions of the trade license are stated below:

  • If an entity violates the condition of license or cause nuisance in the neighbourhood or surrounding then the license might be cancelled or revoked;
  • The entity committing a breach of the terms of the license or applicable laws shall make it liable to pay prescribed penalty;
  • A fine of 50% of the license fees is levied in case of any delay in the trade license renewal process.
  • An appropriate legal action can also be taken against the defaulting entity.>

The fundamental principle behind the incorporation of stringent regulations for adherence is to discourage the conduct of any illegal activity and ensure the maintenance of discipline and clean environment. The freedom of trade commerce and intercourse of the entrepreneurs to do business should refrain from interfering with the public interest of right to life.

 


 

India: Necessity of Trade License

Cybersecurity

Source: www.india.gov.in

India has witnessed a sea-change in its economic growth over the years. The Government has devised numerous policies to facilitate the development of the entrepreneurial segment of the country. Introduction of schemes such as “Make in India” “Startup India”, “Standup India” and “Skill India”, has been made to increase the Gross Domestic Product of the nation. The development of the commercial sector in the country has been one of the primary agendas working towards the prosperity of India.

In order to commence a new business, an authorization from the local Government in the form of a Trade license is required. The license must be procured before beginning manufacturing, exchange or storage of any activity/commodity.

Importance

Trade license is a permission issued by municipal corporation and is essential due to the following reasons:

  • monitors the operation of a specific business from a particular locality;
  • ensures that any citizen is not adversely affected by health hazard or nuisance by the improper conduct of trade;
  • ascertains adherence to the applicable rules, standards and safety guidelines;
  • regulates business locations by way of putting constraints on people from running certain types of commercial activities;
  • controls the number of specific responsibilities of the entrepreneur in connection with his business.

License Qualification

The following entities are required to be obtaina trade license before initiating their business transactions:

  • Food establishment license: All activities related to consumable items and eating joints like hotels, restaurants, canteen, food stall, bakeries, sale of vegetables, meat, provisions store, etc.

  • Industries license: Trades which use locomotives like manufacturing industries, factories, power looms, flour mills, cybercafé, etc.

  • Shop license: Offensive and dangerous trades like barber shop, dhobi shop, timber wood, sale of fire wood, candle manufacturer, cracker manufacturer, etc.

Benefits

The advantages of obtaining trade licenses to the owners thereof are listed below:

  • Restriction on the liabilities;
  • Certification of the fact that no unethical or illegal practices are being carried on;
  • Reinforcement of the business credibility.

In order to assure that proper and legal projects are procured and undertaken by the new business operators, the Government mandates for obtaining a valid trade license before the business comes into existence.

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