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The Government on Monday, 8th May 2017, clarified that it is mandatory on the part of employers to extend the benefit enhanced maternity benefit of 26 weeks, as modified by the Maternity Benefit (Amendment) Bill, 2016, to those women workers who were already on maternity leave on the date of enforcement of the Maternity Benefit (Amendment) Act, 2017, that is April 1, 2017.

The Labour Ministry had notified the Maternity Benefit (Amendment) Act, 2017 on March 28, 2017 and the provisions of the Amendment Act have come into force with effect from April 1, 2017, “except those relating to crèche facility [Section 4(1)], which would come into force from July 1, 2017”.

Keeping in view queries received from various quarters, the Ministry had on April 12, 2017 issued certain clarifications on various provisions of Maternity Benefit (Amendment) Act, 2017.

One of the clarifications issued stated that the enhanced maternity benefit, as modified by the Maternity Benefit (Amendment) Bill, 2016, can be extended to women who are already under maternity leave at the time of enforcement of this Amendment Act.

It is now “mandatory” for employers to extend enhanced leave to women already on maternity leave.

Salient Features of the Act:

  1. Maternity leave available to the working women to be increased from 12 weeks to 26 weeks for the first two children.
  2. Maternity leave for children beyond the first two will continue to be 12 weeks.
  3. Maternity leave of 12 weeks to be available to mothers adopting a child below the age of three months as well as to the “commissioning mothers”. The commissioning mother has been defined as biological mother who uses her egg to create an embryo planted in any other woman.
  4. Every establishment with more than 50 employees to provide for crèche facilities for working mothers and such mothers will be permitted to make four visits during working hours to look after and feed the child in the crèche.
  5. The employer may permit a woman to work from home if it is possible to do so.
  6. Every establishment will be required to make these benefits available to the women from the time of her appointment.

 

While India’s private sector employers lagged behind the government sector and many other countries in terms of providing extended maternity benefits, with the enactment of the Maternity Amendment Act, India has become one of the most progressive countries in terms of providing maternity benefits. The Maternity Amendment Act is definitely a welcome step taken by the Indian Government enabling women to combine their professional and personal roles successfully and to promote equal opportunities and treatment in employment and occupation, without prejudice to health or economic security.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

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Real Estate (Regulation and Development) Act, 2016 came into force on May 1, 2016 culminating the eight year long efforts in this regard and setting in motion the process of making necessary operational rules and creation of institutional infrastructure for protecting the interests of consumers and promoting the growth of real estate sector in an environment of trust, confidence, credible transactions and efficient and time bound execution of projects.

Ministry of Housing & Urban Poverty Alleviation had notified 69 of the total 92 sections of the Act. A proposal for a law for Real Estate was first mooted at the National Conference of Housing Ministers of States and Union Territories in January, 2009.

Early setting up of Real Estate Regulatory Authorities with whom all real estate projects have to be registered and Appellate Tribunals for adjudication of disputes is the key for providing early relief and protection to the large number of buyers of properties.

The Act empowers appropriate Governments to designate any officer preferably Secretary of the Department dealing with Housing, as the interim Regulatory Authority until the establishment of Regulatory Authority under the provisions of the Act.

Under the directions of the Minister of Housing & Urban Poverty Alleviation Shri M. Venkaiah Naidu, a Committee chaired by Secretary (HUPA) has already commenced work on formulation of Model Rules under the Act for the benefit of States and UTs so that they could come out with Rules in quick time besides ensuring uniformity across the country.

Major dilutions under the Realty Act

States such as Odisha and Bihar have notified rules that are completely in sync with the one notified by the Union housing and poverty alleviation ministry.

Haryana’s draft rules have completely left out disclosures by builders on the sanctioned plan, layout and specifications at the time of booking with all subsequent changes till date.

In Maharashtra, a provision has been included to allow builders to take out or divest from a project after occupancy certificate has been issued. This means, the builder can pull out its entire investment before completion of common areas, facilities and amenities.

In UP, the norms related to compounding of offences have been diluted as no specific amount has been mentioned.

In Delhi, the Urban Development Ministry has allowed relaxation, where rules specify that promoters need to provide details of only those court cases which have been disposed of during the last five years.

Till 29th April, 2017, 13 states and Union Territories had notified their final rules.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

 

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In the past few years, the Government has brought a number of legal advancements, policy reforms for protection of women from various sources of violence and atrocities and schemes for launching women helpline, prevention of trafficking and sexual exploitation, for setting up of one stop centres to assist women affected by violence, etc. The courts have also awarded stringent punishments to offenders who commit offences against women including death penalty in the rarest of rare cases.

The Supreme Court, in Bachan Singh v. State of Punjab 1980, had laid down that life imprisonment is the rule and death sentence is an exception and thus, certain guidelines should be followed before a court may award death penalty:

  1. Only in the gravest cases of extreme culpability, this extreme penalty of death may be awarded;
  2. The circumstances of the offender along with the circumstances of the crime have to be taken into consideration.
  3. When the sentence of life imprisonment seems inadequate having regard to the nature and circumstances of the crime, only then death sentence may be awarded; and
  4. The aggravating and the mitigating circumstances have to be balanced.

 

Whereas, in Machhi Singh v. State of Punjab 1983, the Supreme Court had held that in the rarest of rare cases, when the collective conscience of the community is so shocked that it will expect the holders of the judicial power centre to inflict death penalty, then death penalty may be sanctioned.

Applying the aforesaid principles, the Supreme Court in a recent judgment of Mukesh and another vs. State of NCT of Delhi 2017 (Nirbhaya case) involving the brutal rape and murder of para-medical student, has taken into consideration all the evidences and investigation reports including the dying declaration, statements of witnesses, medical examination reports, etc. The mitigating factors as contended by the appellants include absence of pre-meditation to commit a crime of the present nature, poverty-stricken background, no criminal antecedents, the suffering that their family will face if they are awarded death sentence, etc. Whereas, the aggravating circumstances include the brutal and barbaric nature of the crime involving assault on the deceased victim with iron rods, pulling out vital organs, sexual violence, etc that would have caused her extreme mental and physical trauma, that ultimately, led to her death. These circumstances led to the indictment and death penalty of some of the rapists.

According to the Supreme Court, the medical reports and other evidences have established the fact that the accused persons had treated the deceased-victim in a devilish and perverse manner, which is bound to shock the collective conscience of the community. Thus, the Court has held that the aggravating circumstances have outweighed the mitigating factors, and as a result, this case has fallen under the ‘rarest of rare case’ category. Therefore, the SC upheld the order of the High Court to sentence the accused persons to death.

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The Reserve Bank of India (RBI) on Wednesday, April 26, 2017,  proposed a fresh set of regulations regarding Mergers and Acquisitions (M&A) which seek reporting of all deals which are not on the automatic route, to be more stringent, time-bound and provide for mandatory permission

The RBI Regulations followed the new regulations notified by Ministry of Corporate Affairs (MCA) under the Companies (Compromises, Arrangements and Amalgamation) Amendment Rules of 2017 issued on 13 April, 2017.

The MCA notified Section 234 of the Companies Act 2013 (2013 Act) which permits cross border mergers with effect from 13 April 2017. Further, in consultation with the Reserve Bank of India (RBI), the MCA has also notified corresponding amendments to the Companies (Compromises, Arrangements and Amalgamations) Rules 2016 (Merger Rules) by inserting a new Rule 25A effective from 13 April 2017, which deals with cross border mergers.

The proposed Regulations by RBI will be under the Foreign Exchange Management Act, 1999 (FEMA) in order to address the issues that may arise when an Indian company and a foreign company enter into Scheme of merger, demerger, amalgamation, or rearrangement. These Regulations stipulate conditions that should be adhered to by the companies involved in the Scheme. The Regulations shall be named Foreign Exchange Management (Cross Border Merger) Regulations.

The Draft Regulations make (reporting) rules for the company in relation to,

  1. Issue/ transfer of securities in case of inbound M&A /holding of securities in case of outbound mergers;
  2. Repayment of (overseas) borrowings, as the case may be;
  3. Acquisition/holding of assets in or outside India as the case maybe;
  4. In the event the Foreign Exchange Management Act does not permit holding/acquisition of securities, repatriation of their sale proceeds to/outside India, as the case maybe.

 

Additionally, the valuations for both companies for the purpose of cross border merger shall be done as per internationally accepted pricing methodology, certified by a chartered accountant/ public accountant/merchant banker authorized to do so in either jurisdiction.

The RBI is accepting public comments till May 9, 2017.

Taruna Verma

Senior Associate

The Indian Lawyer

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The Central Information Commission on 23rd April 2017 made it clear that ‘missing files’ is no defence and it cannot be used as an excuse to deny information.

Under the Right to Information Act, it is mandatory to publish all relevant facts while formulating important policies or announcing the decisions which affect public. When information is being sought, non-traceability of the file cannot be used to deny information.

The Commission noted that no public authority can deny the right of the applicant to the information sought. A file being non-traceable is a reflection of the inefficient and pathetic management of files by the public authority. If despite best efforts the file cannot be traced, then efforts should be made to reconstruct the file and provide information.

If these files are a part of the public record and form evidence in any case, their destruction would be seen as a destruction of evidence and will invite sanctions under the Public Records Act, 1993 and the Right to Information Act, 2005.

Further, those documents which are no longer to be used by the public authority, but are of a permanent nature, are to be shifted to the national or state archives for safekeeping. Loss of records of a permanent nature would invite penal sanctions under The Indian Penal Code. Appropriate action in case of a missing file would be recovering the file, finding out which employee was responsible for the file being missing, taking suitable disciplinary actions against that employee and addressing the problems which arose due to the file being missing. If despite these efforts the file could not be traced, then the public authority has a moral and legal duty to sincerely address the grievance of the applicant.

The Commission, having the power to direct disclosure of information provided, has the jurisdiction to direct enquiry against the Public Information Officer (PIO) or Central Assistant Public Information Officer (CPIO) claiming that the information sought by the applicant is not traceable.

 
Sanchayeeta Das

Legal Associate

The Indian Lawyer

 

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The Government of India has recently passed the Central Goods and Services Tax (CGST) Act 2017 and the Integrated and Services Tax (IGST) Act 2017 and has announced that the Goods and Services Tax (GST) regime will tentatively be implemented from July 2017. Upon implementation, it would be a dual GST with the Centre and States simultaneously levying it on a common tax base:

  1. The CGST shall be levied by the Centre on intra-State supply of goods and/or services.
  2. The SGST shall be levied by the States on intra-State supply of goods and/or services.
  3. The IGST shall be levied and collected by Centre on inter-state supplies of and/or services in the course of inter-State trade or commerce.

The GST will be charged for the supply of goods and/or services made for consideration in the course or furtherance of business. Moreover, if a dealer transports business assets to his residence for private or non-business use without consideration, it will also be considered as a supply for the purpose of levy of GST.

With the introduction of GST regime, the trade and industry sector may encounter the following advantages and disadvantages:

Advantages of GST to the Trade/Industry:

  • Single tax system would subsume multiple taxes.

For instance, the direct-to-home (DTH), film producers and multiplex players will be saved from levy of multiple taxes such as high rates of service tax and entertainment tax. It may also lower the average ticket price, and increase the footfalls in multiplexes;

  • This single tax system would solve the issue of cascading/double taxation;
  • This system would help to create a single unified national market;
  • The one nation one tax system would facilitate companies to generate savings in logistics and distribution costs as there would be free movement and supply of goods in every part of the country without the need to depend on multiple sales depots across the country.

For instance, companies manufacturing mobile handsets may no longer need to set up and invest in specific entities and warehouses state-wise and transfer goods and stocks to them. This will not only yield ease of doing business for the companies, but also reduce the handset prices across the states. Manufacturers may also pass on the cost benefits, to the consumers, which they would get from consolidating their warehouses and efficiently managing inventory.

  • The tax transparency and ease of doing business, as resulted from the implementation of GST, is expected to lead to increased tax compliance and attract more foreign direct investments across sectors.
  • This simpler tax regime will levy fewer rates of tax and allow fewer cases of exemptions.

Disadvantages of GST to the Trade/Industry:

  • The companies which enjoy concessional rate of excise may see increase in effective tax.
  • The tax collection at source (TCS) guidelines in the GST regime may discourage doing business in India as it will burden the ecommerce companies with increased administration and documentation workload. According to the GST regime, an ecommerce operator has to collect tax at source in respect of each and every supply of the supplier; therefore, such operator will be burdened with the tracking of each supply of goods/services against each of the sellers, state-wise which will be voluminous in nature.
  • Imposition of high rates of GST in certain sectors like aviation may result in services becoming expensive.

The implementation of GST across the country will have diverse effects on various stakeholders including trade and industry. Therefore, public outreach and knowledge sharing programs for all the stakeholders will be conducted by Central Board of Excise and Customs (CBEC), a part of the Ministry of Finance, to popularize and familiarize GST to the trade and industry who are the crucial stakeholders in successful implementation of this reform.

Daliparthy Harini

Legal Associate

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The Goods and Services Tax (GST) Bill has been passed by both Houses of the Parliament (Rajya Sabha and Lok Sabha) and will be effective from 1st July, 2017. The new GST regime is expected to lead to disruption in small businesses and payment cycles.

Under GST, all firms micro, small and big would have to move to a new and more advanced digital technology to facilitate audit reports, tax credits and payments among other things. Many companies will have to make several entries and chalk out the entire chain of business transactions and processes.

All central taxes, including excise duty and service tax besides state levies such as sales tax, value-added tax, entertainment and purchase taxes, would be subsumed into one, once the GST is implemented, thus creating one national market. It is also expected to further boost economic growth by about 1.5 percentage points.

Increased compliance under GST will benefit firms in the long run by providing them access to cheaper capital and lower input costs. However, in the short term, the switch from the unorganized to organized sector will make them less competitive. Thus, this may result in some job losses in the initial phase and some may become less competitive due to higher compliance costs.

Under GST, all firms micro, small and big would have to move to a new and more advanced digital technology to facilitate audit reports, tax credits and payments among other things. Many companies will have to make several entries and chalk out the entire chain of business transactions and processes.

All central taxes, including excise duty and service tax besides state levies such as sales tax, value-added tax, entertainment and purchase taxes, would be subsumed into one, once the GST is implemented, thus creating one national market. It is also expected to further boost economic growth by about 1.5 percentage points.

Increased compliance under GST will benefit firms in the long run by providing them access to cheaper capital and lower input costs. However, in the short term, the switch from the unorganized to organized sector will make them less competitive. Thus, this may result in some job losses in the initial phase and some may become less competitive due to higher compliance costs.

In current proposed form of GST, it exempts small businesses having the turnover below Rs 20 lakh from registering for the GST network (GSTN) unless they want to avail of the benefit of input credit. Small business will be in the Rs 20- 50 lakh bracket, according to GST, due to which family owned business worth around Rs 80- 90 lakh annual turnover may  be tempted to re-structure separate business entities in a manner that they fall within a lower tax bracket under the GST.

According to the latest annual report (2015-2016) of the Ministry of Micro, Small and Medium Enterprises (MSME), there are estimated to be about 51 million MSME business, employing more than a 117 million people and having combined fixed asset value of nearly Rs 15 lakh crore. Under the new GST regime entering the formal sector can provide smaller business access to cheaper capital as well as legal recourse in case of disputes.

However, businesses which are making a switch to the organized sector and moving towards formalization will eventually gain in their business. Ultimately, registered entities will only want to do business with other registered entities because of the reverse charge, the whole purpose of the reverse charge is to increase tax compliance, generate higher revenue and bring transparency into the tax system.

 

Taruna Verma

Senior Legal Associate

The Indian Lawyer

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India is creating a liberal mechanism that would allow all taxpayers to determine their liabilities beforehand. It is planning a significant shift towards a litigation free environment under the GST regime.

The advance ruling mechanism will allow all categories of taxpayers to approach the authority, unlike the existing system that restricts the facility to proposed transactions before the start of a business.

The advance ruling infrastructure will also ensure that every commissionerate has an authority, with a joint commissioner level officer as a member. This is modeled after global best practices in which advance ruling is treated as a revenue function, and carried out directly by revenue authorities without being passed on to any quasi – judicial entity.

At present, advance ruling can be sought for customs, excise duty and service tax for any proposed transaction. It cannot be sought for any existing transaction for central taxes, although the state value added tax regime permits even existing transactions.

This move is the first step toward bringing down litigation.

Advance ruling norms provide that an application for advance ruling or appeal has to be filed online, with fees of Rs. 5,000 or Rs. 10,000 respectively.

The Government has released another set of rules dealing with advance ruling, and those deals with accounts, record, appeals and revision. The proposed GST Council meeting on May 18-19 will take up the final set of rules.

Rules for accounts and records propose to make mandatory the maintenance of separate accounts and records for each activity, including manufacturing, trading and provision of services.

The Government proposes to roll out the new tax regime, which seeks to replace multiple state and central taxes with a single levy, on July 2017.

 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

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The Supreme Court inquired about the reasons for which the Government chose to close the window allowing all categories of people to deposit old notes of Rs 500 and Rs 1,000 after December 31, 2016, under some special circumstances in the month of March’17 to which the Centre informed the Supreme Court that there is no need to open the window allowing all categories of people to deposit old notes of Rs 500 and Rs 1000 after December 31, 2016 under some special circumstances.

Chief Justice of India (CJI) JS Khehar’s bench asked Attorney-General Mukul Rohatgi to file an affidavit within two weeks explaining if the Government intends to open the window to deposit demonetised currency for all, if not then to explain the reasons.

The affidavit has mentioned about malpractices and irregularities committed by people during the demonetisation period from November 9, 2016 to December  31, 2016 and said  the income tax department has initiated verification drive named “Open Clean Money” to leverage technology and data analysis for verification of cash deposits.

More than 3.78 lakh out of 18 lakh, high risk cases have been detected and have been taken up for assessment and investigation.

It further revealed seizure of undisclosed assets worth Rs 2890 crore. More than 15000 surveys which resulted detection of undisclosed income of more than Rs. 33,000 Crore.

The option for opening the window was closed after finding misuse of the money by some segment of people.

The court heard a group of Public Interest Litigation or PILs against the RBI and other banks for not accepting any deposits of old notes after December on either medical ground or any other unavoidable circumstances. The petitioners pointed out that Prime Minister in his speech had assured and subsequent RBI notification had also mentioned about deposit of old notes after December 2016 under special circumstances but that clause was taken away by the Government in the Specific Bank Notes (Cessation of Liabilities Act).

The Court will take up the Government affidavit on April 11, 2017.
 

Sanchayeeta Das

Legal Associate

The Indian Lawyer

 

 

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In a major boost for anti-death penalty jurisprudence, the Supreme Court of India on Friday, 7th April, 2017 observed that death penalty breaches the reformative theory of punishment under Criminal Law.

A Bench of Justices Pinaki Chandra Ghose and Rohinton F. Nariman made this observation in an appeal filed by the State of Maharashtra against a verdict of the Bombay High Court in a double-murder case. The Trial Court had found the Accused Nisar Ramzan Sayyed guilty of murdering his three year old son Sayej and pregnant wife Summayya, thus was sentenced to death by Additional Sessions Judge, Shrirampur. The Bombay High Court had, however, acquitted the Accused. The incident was the culmination of a series of ill-treatment episodes made by the convict to the deceased wife from whom he was demanding Rs. 50,000 for purchasing an Auto Rickshaw as Dowry. Summayya’s father being a poor man was unable to fulfil the demand.

On29thOctober, 2010, the Accused set the his wife on fire by pouring kerosene oil and also threw his three year old son on the  burning body of his wife because of which Summayya and their son sustained burn injuries resulting in the death of the son on the spot. Later Summayya was taken to the hospital, but she succumbed to her injuries on 3rd November, 2010, after giving birth to a dead baby fetus.

The Apex Court, setting aside the Bombay High Court Judgment of acquittal, restored the conviction under Section 302 and 498A of Indian Penal Code. The Supreme Court of India goes on to consider whether death penalty should be awarded in this case. It then relies on the 262nd Report of the Law Commission and states:

“…the Law Commission of India has submitted its Report No.262 titled “The Death Penalty” after the reference was made from this Court to study the issue of Death Penalty in India to “allow for an up-to-date and informeddiscussion and debate on this subject”. We have noticed that the Law Commission of India has recommended the abolition of death penalty for all the crimes other than terrorism related offences and waging war (offences affecting National Security).”

The Supreme Court of Indiaproceeded bydeciding against upholding the Bombay High Court order imposing death sentence on the Accused, the Bench made the most interesting observation regarding Death Penalty andheld:

 

“We have noticed that the Law Commission of India has recommended the abolition of death penalty for all the crimes other than terrorism related offences and waging war (offences affecting National Security). Today when capital punishment has become a distinctive feature of death penalty apparatus in India which somehow breaches the reformative theory of punishment under criminal law, we are not inclined to award the same in the peculiar facts and circumstances of the present case.”

 

The Apex Court, after taking note of the dying declaration of his wife and other circumstantial evidence, held that Sayyed’s guilt was proved beyond reasonable doubt but this was not a “rarest of the rare case” that warranted Sayyed to be sentenced to death. The Apex Court therefore, imposed the death sentence of the convict to imprisonment till his natural life.

Taruna Verma

Senior Legal Associate

The Indian Lawyer

 

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