Recently, the Union Minister for Finance, Corporate Affairs, Railways and Coal, Shri Piyush Goyal has presented the Interim Budget 2019-20 in the Parliament of India on 01.02.2019. This Budget is said to provide a relief to the middle-income group, farmers, medium and small enterprises and traders, etc.

Until now, the tax benefits given to the middle-class tax payers had included:

Basic exemption limit had been maintained at Rs. 2.5 Lakh;

Tax rate had been kept at 5% for the income tax slab of Rs. 2.5 Lakh to Rs. 5 Lakh;

Standard deduction, a flat amount deducted from the salary of an employee before computing the taxable income, of Rs. 40,000 had been introduced for the salaried class;

Deduction from taxable income of savings in respect of life insurance premium, provident fund contributions, etc as in Section 80 C of Income Tax Act 1961 as amended thereof had been maintained at Rs. 1.5 Lakhs

Deduction from taxable income of home loan interest for self-occupied house had been maintained at Rs. 2 Lakhs

It has been observed that in the Financial Year 2017-18, there has been an increase in the filing of income tax returns, tax collections nearly doubled to Rs. 12 Lakh Crore, etc. Thus, vide Interim Budget 2019-20, the Government has decided to pass on the following benefits from the tax reforms to the middle-class taxpayers:

Persons not required to pay any income tax:

Those having taxable annual income up to Rs. 5 Lakhs

Those having gross income up to Rs. 6.50 Lakhs, only if they make investments in provident funds, specified savings and insurance etc

Persons having higher income also not required to pay any income tax after the following deductions from taxable income:

Interest on home loan up to Rs. 2 Lakh

Interest on education loans

Contributions towards National Pension Scheme, medical insurance, medical expenditure on senior citizens etc

These tax sops may provide tax benefits of Rs. 18,500 Crore to an estimated 3 Crore middle class taxpayers comprising of self-employed, small businesses and traders, salary earners, pensioners and senior citizens.

Standard deduction, prior to computing taxable income for salaried persons, has been raised to Rs. 50,000. This may provide additional tax benefit of Rs. 4,700 Crore to more than 3 Crore salary earners and pensioners

Tax benefit proposals:

To exempt levy of income tax on notional rent, i.e. a rent that one would have earned if the property would have been let out, on a second self-occupied house. This is in consideration of the difficulties faced by the middle-class people who have to maintain families at two locations on account of their job, education of their children, care of parents etc.

To increase the tax deducted at source (TDS) threshold for deduction of tax on rent to Rs. 2,40,000 for providing relief to small taxpayers

Increase in TDS threshold on interest earned on bank deposits or post office deposits to Rs. 40,000 for providing benefit to small depositors and non-working spouses

Also, the existing rates of income tax would continue

Extension of deadline to 31.03.2020 to avail tax benefits for affordable housing under Section 80- IBA of Income Tax Act 1961 as amended thereof

Extension of tax exemption period on notional rent, on unsold inventories, to two years

Rollover of payment of capital gain tax is allowed if a person can show investment of capital gains up to Rs. 2 Crore in two residential houses

Processing of returns and refunds to be fast tracked in two years with the help of advanced technology

In the said Interim Budget 2019-20, the Government has aimed at reducing the tax burden on middle class families and reportedly, the middle-class tax payers have welcomed these tax convenient reforms.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer



With the boom in Internet usage and Social Media, the society is changing its way of shopping for its basic necessities such as food, water, clothes etc. The technology driven people now take recourse to their electronic devices to purchase any commodity and fulfill all of their needs. Due to such technology dependency of the people, more and more companies are entering into the retail industry by way of e-commerce. The Retail Industry in India has been one of the most regulated sectors and there has been an uprise in foreign investment by companies like Walmart, Amazon, Alibaba for online retailing.

At present, the Foreign Direct Investment Policy, 2017 permits foreign investment of 100% by way of automatic route in E-commerce marketplace model, though, recently on 26th December, 2018, the Department of Industrial Policy and Promotion (DIPP) under the Ministry of Commerce, Government of India introduced certain changes termed as clarifications to the 2017 policy. The changes are likely to affect the e-commerce space which is presently dominated by Walmart and Amazon who control more 75% of the online retail market. The Key changes which are being brought under the Policy are as follows:-

An entity providing ecommerce marketplace (“Marketplace Entity”) shall not exercise ownership or control over the inventory which it intends to sell

A vendor shall not be permitted to sell on the marketplace owned by the Marketplace Entity if such Marketplace Entity or its group companies own any stake in the vendor or exercises control over the inventory of such vendor.

Marketplace Entity will not influence directly or indirectly sale price of goods or services sold over the marketplace by the vendors and shall maintain level playing field for all vendors.

A Marketplace Entity will not mandate any seller to sell any product exclusively on its platform only.

An ecommerce marketplace entity will be required to furnish a certificate along with a report ofa statutory auditor to Reserve Bank of India, confirming compliance of above guidelines, by 30th of September of every year for the preceding financial year.

The changes being brought in the E-commerce sector is likely to affect the major E-Commerce players such as Flipkart, Amazon, Myntra, Jabong, etc. The customers of such websites are given benefit in terms of pricing, delivery, etc. By virtue of the changes being brought in the Policy, the market players will be prevented to sell products or endorse the products of such companies, in which they are holding a stake. The companies will not be able to insist on exclusive tie-ups with brand owners owing to their dominant position in the market. Companies such as Myntra which have invested in companies, whose products they are endorsing on their own website shall be halted, one such being HRX, a clothing brand of famous actor Hrithik Roshan in which Myntra is an investor, products will not be henceforth sold on their website.

With the change, all the marketplace companies shall bear the onus of reporting their compliance annually to the Reserve Bank of India.

The change is said to be beneficial to small and medium retail players, who have had to face strong competition in the market due to indiscriminate discounting by the dominant players. The Indian retail companies such as Future Retail shall also be benefited from such changes as they will also be able to provide discounts while simultaneously providing delivery services.

However, there remain some discrepancies in the changes being introduced, which appears shall be brought to light in the course of time. The affect being brought though shall benefit the small market players but will also affect the Retail Industries dominant market players. Such major steps at the brim of election can be a knock out of the park or a failed attempt to revolutionize the retail industry.

Sanjana Bakshi

Senior Legal Associate

The Indian Lawyer



Prime Minister Shri Narendra Modi has recently inaugurated the 9th edition of Vibrant Gujarat Summit (Summit) to beheld from 18.01.2019 to 20.01.2019 in Gandhinagar, Gujarat, India, where Hon’ble Ministers from various countries including Uzbekistan, Rwanda, Denmark, Czech Republic, Malta, representatives and delegates from partner countries including Australia, Canada, France, Japan, United Arab Emirates (UAE), etc would be participating.

The Summit was conceptualized in 2003 to re-establish the State of Gujarat as a preferred investment destination within India and to provide a platform for knowledge sharing and effective partnerships.

The 9th Edition of the Summit aims to achieve the following objectives:

To encourage international bilateral cooperation and ensure that global collaborations and partnerships are not limited to national capital but extend to State capitals as well.

To ensure that benefits of development reach the farthest corners of the State of Gujarat.

To enhance the quality of life, services and infrastructure by inviting and encouraging investments in the State of Gujarat.

To make a place in the top 50 global ranking of World Bank’s Doing Business Report.

In the recent World Bank’s Ease of Doing Business Ranking 2019, India has achieved a remarkable overall ranking of 77th position out of 190 countries, thereby, successfully shooting up 23 places from its earlier 100th rank.

To focus on scaling up investments in next generation infrastructure including roads, ports, railways, airports, telecom, digital networks and energy.

The major events to be held in the 9th Edition of the Summit include roundtable interaction for opportunities in Science, Technology, Engineering and Mathematics (STEM), Education and Research, exhibition on Futuristic Technologies and Space Exploration, Seminar on Port Led Development and Strategies to establish India as the Trans-shipment Hub of Asia and to showcase success stories of Make in India. The 9th Edition of the Summit has discussed the following recent reforms and initiatives introduced by Government of India:

India has become one of the most open countries by allowing foreign direct investment (FDI) under automatic route in 90% of the sectors.

Digital payments and information technology (IT) based transactions has made doing business in India safer, easier and corruption-free.

India has reformed the goods and services tax (GST) structure to benefit small and medium businesses in India.

The exit route for business set ups in India has become easier with incorporation of Insolvency and Bankruptcy Code 2016 as amended thereof.

The Government initiatives under Make in India, Digital India, Skill India, etc have enabled conversion of India into a global manufacturing hub.

Further, the Ayushman Bharat Scheme has been able to provide immense investment opportunities in the areas of health infrastructure, medical equipment manufacturing, and healthcare services.

The public private partnership (PPP) regime in India for infrastructure has been made more investor friendly.

The Government has made available electricity, cooking gas, proper sanitation facilities in most of the villages in India. It further aims to develop the remotest corners of the State and the country.

The tourist, aviation, infrastructure and such other sectors are rapidly developing in India.

Reportedly, Mr. Alexandre Ziegler, the French Ambassador, is leading a 78-member delegation to the 9th Edition of the Summit including companies with expertise in areas such as aviation, logistics, banking and finance, energy, infrastructure, IT, telecommunications and smart city solutions. A number of French companies have set up their base in India and most, particularly in Gujarat and have committed to investing and innovating in India.

These Government efforts to give a spur to the investments in Gujarat may give rise to several other such summits annually in other states across India and thus, make way to converting India as a preferred investment destination.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer

Citizenship Amendment Bill, 2016


With the impending elections due for India in mid-2019, yet another major step has been taken by the Government under the leadership of Mr. Narendra Modi. On 8th January, 2019, the Lok Sabha passed the Citizenship (Amendment) Bill, 2016 which seeks to provide Indian Citizenship to those Non-Muslim persons who have sought for shelter in India due to religious persecution or due to fear of it, who originally belong to Afghanistan, Pakistan and Bangladesh. It is mainly applicable to persons belonging to Hindus, Jains, Christians, Sikhs, Buddhists and Parsis religion, coming from Afghanistan, Pakistan and Bangladesh.

The Citizenship Act of 1955 defines “Illegal Immigrant” under Section 2(b), as a person who has entered India without travel documents or has overstayed the date specified in the documents. With the introduction of the Citizenship (Amendment) Bill, 2016, it intends to give Indian Citizenship to such immigrant persons and appears to be an exception to the above mentioned definition.

The Bill however, has caused a huge controversy and led to backlash from inside and outside the Parliament. The Assamese have risen and held complete blockade even when the Bill was being introduced in the Lok Sabha. They maintain a stand that the any illegal immigrant, irrespective of their religion, should be deported. The Home Minister Rajnath Singh commenting on the Bill said that “the new legislation aims to give Indian citizenship to all persecuted religious minorities from these three neighboring countries like Hindus, Jains, Sikhs, Christians, Buddhists and Parsis” and sympathizing with them saying “they have nowhere else to go.”

The uproar by the residents of Assam has been due to the fact that the Amendment Bill is in clear contrast to the Assam Accord, 1985 which clearly stated that all immigrants entering into India after 1971 shall be stated as foreigner also coupled with the fact the North-east India is where majority of migration occurs. With the coming into force such Bill, it would be unfair to citizens of North East and the ties between North- Eastern states with the remaining country shall weaken. The Bill is also in complete contradiction to the National Register of Citizen (NRC) arising out of the Assam Accords.

It has been estimated that out of all the immigrants entering into India after 1971, there are 15 lakh Bengalis and remaining Muslims who have been given the status of foreigners, with the coming into force such bill, it shall give immunity to Hindu Bengalis and would single out the Muslim Bengali community. Such a scenario where the citizenship is being given on reason of religion and the Muslims are being singled out, it is clearly against the fundamentals of the Indian Constitution being “Secular” in nature.

It has been the opinion of many that the step taken by the ruling BJP is an attempt to invite the vote bank of the Hindu Bengalis by providing them with such immunity by bribing them with Indian Citizenship, in the upcoming general elections. Simultaneously, enticing the Assam community by promising to look into Assam Accord, ensuring that their cultural identity and ethnicity shall be protected.

With the clashes on opinion on the Citizenship Amendment Bill, the question remains whether the Bill shall see the light of the day and be passed, whilst it is going to be tabled before the Rajya Sabha in February, 2019.

Sanjana Bakshi

Senior Associate

The Indian Lawyer

Rise in Price of Coal Due to Change in Foreign Law is not Force Majuere


The Delhi High Court has in the case of Coastal Andhra Power Limited v. Andhra Pradesh Central Power Distribution Corporation Limited & Ors. passed a judgment dated 15.01.2019 and held that in Power Purchase Agreement (hereinafter referred “as PPA”), the clause of Force Majuere cannot be invoked, as it does not comprise of “the escalation of price of coal” and “change in law abroad”, which subsequently liberates the power generation company from its obligations under PPA.

 The Coastal Andhra Power Limited (hereinafter as “Appellant”) under PPA had agreed to supply power to Andhra Pradesh Central Power Distribution Co. Ltd. (APCDL). And further there was an import of coal from Indonesia for power generation by the Appellant. However, the price of coal escalated due to some changes in law that occurred in Indonesia. Therefore, the Appellant said that the viability of the power generation was not possible until renegotiation of the prices for the coal has been done with APCPDL. However, the negotiation failed as APCDL was unwilling to renegotiate the price of the coal. Subsequently, the contract was terminated by APCDL and it claimed damages for an amount of Rs. 400 Crores from the Appellant.

Therefore, the Appellant filed an application under Section 9 of Arbitration and Conciliation Act, in order to detain APCPDL from invoking the bank guarantee furnished by Appellant for the claim of damages, in which stay was granted by the Single Judge and later got relinquished. Aggrieved by the order, the Appellant filed an appeal under the Division Bench.

Meanwhile, Central Electricity Regulatory Commission(CERC) was also approached by the Appellant under the Electricity Act, since the disputes related to price tariff are to be submitted to CERC as given under the Agreement.

Hence, there were parallel proceedings going on, one before the CERC and other in Division Bench of High Court. However, the CERC terminated its proceeding as there was a pendency of the proceeding in the High Court.

Therefore, the main issue before the High Court was whether Force Majuere clause can be invoked due to rise in price of coal as a consequence of change in foreign law. However, this issue was rejected by the Division Bench of High Court, by relying upon the Supreme Court Case decision in Energy Watchdog v CERC (2017) SCC ONLINE SC 378. The Apex Court held that “”an unexpected rise in the price of coal will not absolve the generating companies from performing their part of the contract for the very good reason that when they submitted their bids, this was a risk they knowingly took”. Further, it was also held that, under the PPA the defense of Force Majuere clause cannot be invoked due to change in Foreign Law.

Therefore, in keeping with the precedent of the Supreme Court in above mentioned case, the High Court rejected the plea of the Appellant that mere change in Indonesian law which led to increase in price of coal does not come under the purview of the Force Majuere clause given under PPA.

Satyam Singh Pal


The Indian Lawyer



The Supreme Court of India has recently passed a judgement dated: 08.01.2019 in the matter of Sicagen India Ltd. vs Mahindra Vadineni & Ors., whereby the Apex Court held that a ‘cheque bounce’ complaint filed based on the second statutory notice issued after the re-presentation of cheques, is maintainable.

The Complainant herein had been issued three cheques from the accused,and after they were presented the same were dishonoured, the Complainant issued a notice to the accused on 31.08.2009 demanding for the repayment of the amount. The Complainant re-presented the said three cheques again, which were dishonoured once more leading  the Complainant to issue a statutory notice on 25.01.2010 and further filed a complaint under Section 138 of Negotiable Instruments Act, 1881 (the Act) based on the second notice dated 25.01.2010. The Madras High Court quashed the complaint alleging that the complaint was not maintainable as the Complainant postponed the matter and issued a second notice and filed a case under the said second notice.

The Apex court considering the case of MSR Leathers vs Palaniappan dated: 10.09.2013, set aside the impugned judgement on the Madras High Court and held that, there is nothing in the provisions of Section 138 of the Act that forbids the cheque holder to make successive presentation of the cheque and institute the complaint based on the second or successive dishonour of the cheque.

Suchit Patel




The Goods and Services Tax Council (GST Council) of India has recently announced a list of new amendments and rules benefiting the small businesses on 10th January 2019. Earlier, under the GST regime, there was a uniform threshold of Rs. 20 Lakh for manufacturers, service providers and traders for registration and payment of GST.

The following are the new set of regulations that the GST Council announced on 10th January 2019 for the benefit of the small businesses in India:

Increase in GST registration and payment limit from Rs. 20 Lakhs to Rs. 40 Lakhs for suppliers of goods:

The aggregate turnover of Rs. 40 Lakhs would now be exempted from the GST in general cases

The aggregate turnover of Rs 20 Lakhs would now be exempted from the GST in the hilly and north eastern states and special category states.

The small business having an annual turnover of Rs. 50 Lakh in the preceding financial year may avail the benefits of a composition scheme whereby they have to pay only 6% GST.

Free accounting and billing software would be provided to small taxpayers by Goods and Service Tax Network, a not for profit organisation owned by Government of India and private players jointly.

The tax payers under composition scheme have to file only one return in a year.

The GST Council decided to set up a seven-member Group of Ministers (GoM) to examine the proposal of composition scheme for real estate sector.

These reforms would be implemented tentatively from the 1st of April of 2019 for the ease of business of the small and medium business sectors.

Suchit Patel


The Indian Lawyer


Harini Daliparthy

Senior Associate

The Indian Lawyer



The National Company Law Appellate Tribunal (NCLT), New Delhi has in the case of Dr. Vishnu Kumar Agarwal v/s M/S Piramal Enterprises Ltd. passed a Judgment dated 08.01.2019 and held that the corporate insolvency resolution process (Insolvency Process) can be initiated under the Insolvency and Bankruptcy Code 2016 as amended thereof (the Code) directly against the Corporate Guarantor (Guarantor) by Financial Creditor (Creditor/FCs) without having initiated the Insolvency Process against the Corporate Debtor (Debtor). Thus, it is not mandatory to initiate the Insolvency Process against the Debtor before initiating the Insolvency Process against the Guarantor.

In this case, the Financial Creditor had initiated insolvency proceedings against the Debtor and the Guarantor on the ground that the Debtor had defaulted payment. This was challenged by the Guarantor on the ground that these insolvency proceedings should be first moved against the Debtor and not the Guarantor.

The NCLT Appellate Tribunal, New Delhi rejected the contentions made by the Guarantor and held that there is no bar under the Code for filing two applications simultaneously under Section 7 against the Debtor as well as the Guarantor. Although, once any one of the applications is admitted in the NCLT against either the Debtor or the Guarantor, the second application for the same set of claim and default cannot be admitted. Thus, the NCLT Appellate Tribunal, New Delhi upheld the Insolvency Process against the Debtor and did not admit the Insolvency Process against the Guarantor.

Satyam Singh Pal


The India Lawyer


Harini Daliparthy

Senior Legal Associate

The Indian Lawyer



The Parliament of India has recently passed the Constitution (One Hundred and Twenty-Fourth Amendment) Bill, 2019 (the Bill) in order to provide reservation in public employment and higher education for economically weaker sections to the general category candidates on 08.01.2019 and 09.01.2019.

The Bill seeks to amend Article 15 and Article 16 of the Constitution of India 1950 as amended thereof (the Constitution of India). Article 15 of the Constitution of India provides for prohibition of discrimination on grounds of religion, race, caste, sex or place of birth, whereas, Article 16 of the Constitution of India provides for equality of opportunity in matters of public employment.

The amendment to Article 15 of the Constitution of India seeks to provide that the State may make special provision for:

Advancement of socially and educationally backward classes of citizens pertaining to admissions to educational institutions including private educational institutions, whether aided or unaided by the State, other than the minority educational institutions

Reservation of a maximum of 10% of the total seats in each category, in addition to the existing reservations

Further, amendment to Article 16 of the Constitution of India seeks to provide that the State may make special provision for:

Reservation of appointments or posts in favour of any economically weaker sections of citizens, other than the backward classes of citizens not adequately represented in the services under the State

Reservation of a maximum of 10% of the posts in each category, in addition to the existing reservations

The said amendments have been proposed by the Government of India on the grounds that economically weaker sections of citizens have been unable to attend higher educational institutions and public employment owing to financial incapacity to compete with those who are economically more privileged and also, that they are unable to satisfy the criteria and avail the existing reservations under Article 15 and 16 of the Constitution of India. Thus, the Government has proposed the aforesaid amendments, in view of Article 46 of the Constitution of India, which provides that the State should promote the educational and economic interests of the weaker sections of the people.

The said amendments have been challenged in the Supreme Court in Youth for Equality and another vs. Union of India and others on 10.01.2019 on certain grounds which are as follows:

That as per the Supreme Court judgment in Indira Sawhney Vs. Union of India 1992, economic criteria cannot be the sole basis for reservations under the Constitution of India.

That it has violated the basic feature of equality enshrined in Article 14 of the Constitution of India.

That reservations may be made by the State only to the extent of 50% as held by the Supreme Court in Nagaraj Vs. Union of India & Ors. 2006. Therefore, in addition to the 50% existing reservations in higher education and public employment each, further reservations of 10% cannot be made in higher education and public employment each.

With the passage of the Bill in the Parliament of India, the Bill would now go to the President of India for his assent to become a law.


Harini Daliparthy

Senior Legal Associate

The Indian Lawyer



The Ministry of Commerce and Industry, India has recently issued certain updates and clarifications on 26.12.2018 regarding foreign direct investment (FDI) in various models of e-commerce sector in India.

The Ministry further clarified that as per the FDI Policy 2017, e-commerce entities in India can engage only in business to business (B2B) e-commerce and not in business to consumer (B2C) e-commerce. This implies that FDI is allowed only when the e-commerce entity acts as an information technology platform connecting the buyer and the seller to facilitate purchase and sale of products between them (Marketplace-based Model of e-Commerce), but FDI is not permitted in case the e-commerce entity owns the inventory of goods and services and sells them to consumers directly (Inventory-based Model of e-Commerce).

These clarifications have been issued in light of recent events where it has been noticed that a number of e-commerce entities in India have been selling goods owned by them to consumers to earn higher margins. For instance, as per various newspaper reports, Amazon Basics by Amazon, Perfect Homes, MarQ and others by Flipkart and other such self-owned brands have been reportedly sold by the respective e-commerce entities.

The clarifications further state that 100% FDI is permitted only in Marketplace-based Model of e-Commerce and not in Inventory-based Model of e-Commerce.

Therefore, the e-commerce entities are prohibited from engaging in the following business model, failing which, it would render such business into Inventory-based Model of e-Commerce:

It cannot exercise ownership or control over the inventory of goods of a vendor registered with the e-commerce website

It cannot allow more than 25% purchases of such vendor from the particular e-commerce marketplace

It cannot allow an entity to sell goods and/or services through its e-commerce platform if the e-commerce entity or its group company has an equity participation in such entity

Therefore, the e-commerce entity can only engage in Marketplace-based Model of e-Commerce, wherein:

The details of the vendor have to be clearly specified

The vendor would be responsible for the delivery of goods and/or services, after sales services, warranty/guarantee of goods and/or services sold, etc

The e-commerce entity would not be able to influence the sale price of the goods and/or services sold by vendors registered with the e-commerce entity

The e-commerce entity may provide services of logistics, warehousing, advertisement/ marketing, payments, financing etc to vendors registered with the e-commerce entity

The e-commerce entity may provide fair and non-discriminatory cash-backs to buyers

The e-commerce entity cannot mandate any vendor registered with it to sell its products exclusively on its platform

Thus, the Government of India has directed all e-commerce entities in India to comply with the said FDI Policy in accordance with the clarifications, by 01.02.2019. But various entities such as Amazon, Walmart owned Flipkart, etc may seek extension of the said deadline of 01.02.2019 for implementing the updates under FDI Policy, whereas, other retailers such as Snapdeal have welcomed these updates in the FDI Policy stating that this would help to protect the interests of small and medium sized enterprises and independent sellers who form the majority of vendors on e-commerce websites.

Harini Daliparthy

Senior Legal Associate

The Indian Lawyer