General Updates
in the Liberalised Remittance Scheme by Reserve Bank of India (“RBI”)
RBI has made further amendments in the Master Direction on Liberalised Remittance Scheme (“LRS”). The recent amendment expanded the scope of permissible remittances through International Financial Services Centres (“IFSCs”). Previously, residents were allowed to open Foreign Currency Accounts (“FCA”) in IFSCs for limited purposes such as investments in IFSC securities and payment of education fees in IFSC-based foreign institutions. Now, under the revised directions, residents can use LRS to remit funds up to US$ 250,000 annually for various purposes within IFSCs. These include availing financial services or products under the International Financial Services Centres Authority Act, 2019 and conducting current or capital account transactions in foreign jurisdictions (excluding IFSCs) through FCAs held in IFSCs. The amendment reflects RBI's efforts to facilitate broader financial transactions within IFSCs, aligning with evolving financial regulatory frameworks and promoting international financial activities from India.
Draft Regulations and Directions issued by RBI
With the aim to promote ease of doing business particularly for small exporters and importers and empowering Authorized Dealer banks to provide quicker and more efficient service to their foreign exchange customers – drafts regulations and directions are issued by RBI for public comments and inputs. Key highlights of the drafts include declaration from the exporters end with full export value of goods or services; payments for exporters must be received as per the Foreign Exchange Management (Manner of Receipt) Regulations, 2023; prior approval required from AD Bank; provision of caution list.
Proposal approved for display of nutritional information labelling in bold letters and bigger font size
The Food Safety and Standards Authority of India (FSSAI) with the recent approved proposal aims to empower consumers to better understand the nutritional value of the product they are consuming and make healthier decisions. As per the recent proposal by FSSAI – it is mandatory to display nutritional information regarding Total Sugar, Salt and Saturated Fat in bold letters and relatively increased font size on labels of packaged food items.
Instant (Tatkal) issuance of License / Registration in certain categories of food businesses
FSSAI has introduced instant scheme for instant issuance of license / registration for certain selective Kind of Business (“KoB”) and Food Products. Few key highlights of the scheme include method of digital verification in case of License and Registration separately and declaration from the Applicant's end; restricted validity of license as 1 (one year), disclaimer to be displayed on such License/ Registration Copy.
Union Budget 2024-2025 presented
The Union Minister of Finance and Corporate Affairs has presented the Union Budget 2024-25 in Parliament. Key highlights of the budget include revised Income Tax Slabs; increased deductions and exemptions for salaried employees and pensioners; abolition of the angel tax; one-month salary of up to INR 15,000 (US$ 200 Approximately) to be provided in 3 (three) instalments to first-time employees, as registered in the EPFO; incentive to be provided at specified scale directly, both employee and employer in manufacturing sector, with respect to their EPFO contribution in the first 4 (four) years of employment; reimbursement up to INR 3,000 (US$ 50 Approximately) per month for 2 (two) years towards EPFO contribution of employers, for each additional employee.
Corporate Law Updates
Migration of Forms from MCA V2 to MCA V3 Portal
The Ministry of Corporate Affairs (“MCA”) has migrated nine additional forms from the MCA V2 portal to the MCA V3 portal. These nine forms include MSME, BEN-2, MGT-6, IEPF-1, IEPF-1A, IEPF2, IEPF-4, IEPF-5 and IEPF-5 e-verification report.
MCA Relaxation on Additional Fee Payment for Forms BEN-2 and MGT-6
In view of the migration of forms BEN-2 (Return to the Registrar in respect of declaration under relevant provisions of the Companies Act, 2013) and MGT-6 (Form of return to be filed with the Registrar under relevant provisions of the Companies Act, 2013) from the MCA V2 portal to the MCA V3 portal, the MCA, through its General Circular, allowed an additional 15 (fifteen) days for the filing of these forms with the Registrar without incurring additional fees.
The Specified Companies (Furnishing of Information about Pay ment to Micro and Small Enterprise Suppliers) Amendment Order, 2024 (“Order”)
The MCA has amended the Specified Companies (Furnishing of Information about Payment to Micro and Small Enterprise Suppliers) Order, 2019. According to the same, only specified companies with outstanding payments to any Micro or Small Enterprise supplier for more than 45 (forty-five) days from the date of acceptance or deemed acceptance of goods or services under relevant provisions of the Micro, Small and Medium Enterprises Development Act, 2006 are required to furnish information in MSME Form I to the Registrar. The Order also mandates the use of a new form, replacing the existing MSME-1 for such filings.
The Companies (Appointment and Qualification of Directors) (Amendment) Rules, 2024 (“Rules”) notified
According to the Rules, if a director intends to update his/her personal mobile number and/or email address during the financial year, this can now be done by submitting e-form DIR-3 KYC on payment of INR 500 (US$ 7 approximately). Previously, once e-form DIR-3 KYC was filed, mobile numbers and email addresses could not be updated until April the following year. The amendment will come into effect on 1 August 2024.
The Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2024 issued
The MCA has issued the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Amendment Rules, 2024, which introduced significant changes to the compliance framework for the Investor Education and Protection Fund (“IEPF”). These changes include the merger of forms IEPF-3 with IEPF-4 and IEPF-7 with IEPF-1, as well as revisions to the payment process within the MCA V3 system. Additionally, due to the transition of IEPF forms from the MCA V2 to the MCA V3 portal, the MCA has waived the additional fee for filing various IEPF e-forms and the e-verification of claims filed in e-form IEPF-5 until 16 August 2024.
Labour Law Updates
Liability of Company regarding Employee State Insurance (“ESI”) dues
It has been ruled by Bombay High Court that the liability to pay ESI dues is of the company and in case of an occupier having ultimate control over affairs of the company, he/she is liable to meet the demand. However, the liability of the occupier is not personal. If the dues of ESIC are of a company the same can be recovered from the company / its assets.
Employer's liability to compensate in case of accidental death of contractual workman
High Court of Jammu & Kashmir and Ladakh reiterated that as per specific provisions of the Employees' Compensation Act, 1923 (“Act”) the principal employer is liable to compensation in respect of accidental death of workman in the course of his employment through contractor. Further, the scheme of the Act is intended to secure the workman's right to claim compensation not only against the immediate employer, be it a contractor or sub-contractor, but also against the principal employer.
Intellectual Property Update
Personality Rights of the famous Bollywood Singer protected
In continuation of the wave of cases upholding personality rights in India comes in another order from the Bombay High Court upholding rights of a famous Bollywood Singer. The Court observed that Artificial Intelligence (“AI”) tools generating content by using singer's voice, image or other attributes without consent violate "personality rights" and has directed the AI platforms to remove such infringing content.
Case Laws
Arbitration Clause in an invoice constitutes arbitration agreement
The Delhi High Court (“DHC”) has ruled that an arbitration clause in an invoice can constitute an arbitration agreement under relevant provisions of Arbitration and Conciliation Act, 1996. As per facts of the case, the invoices placed on records are signed by the representative of the petitioner and the representative of the respondent. Further the invoice, among various terms and conditions contains the clause “All Disputes Subject to 'Delhi' Jurisdiction arbitration only”.
Ex-parte foreign judgment on the merits is conclusive and executable
Division bench of DHC has upheld that if a foreign judgment is given ex-parte on the merits of the case, the same would be conclusive and executable in India.
Lock-in Period in Employment Contracts not violative of fundamental rights
It has been decided by DHC that lawful and reasonable covenants including lock-in period which are operative during the term of employment are valid and enforceable. Further it has been held that such covenants are not violate the fundamental rights enshrined in the Constitution of India and arbitrable in nature.
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