VOL III                                                      ISSUE NO. 40                                October 02, 2018          

In This Issue

India: Proposed Amendment to Drugs and Cosmetics Rules, 1945

Recently the Central Government after consultation with the Drugs Technical Advisory Board proposed amendment to the Rules. The draft Drugs and Cosmetics (Amendment) Rules, 2018 proposes to make package inserts in each salable unit compulsory.

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Validity and Authentication of AADHAAR: much-awaited judgment by Hon’ble Supreme Court of India

The Supreme Court of India’s constitutional bench comprising Hon’ble CJI Dipak Misra, Hon’ble A.K. Sikri and Hon’ble A.M. Khanwilkar, JJ. have pronounced a detailed judgment  in the matter of Aadhaar. By majority judgment.

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India: Supplier liable for not passing GST benefits

The National Anti-Profiteering Agency imposes liability on the suppliers for not passing on the benefits of GST rate reduction.

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  India: Incentivisation of Electric Vehicles 

 

The Government is in the process of encouraging the induction of electric vehicles in the Indian transportation system.

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India: Proposed Amendment to Drugs and Cosmetics Rules, 1945

 

 

Source: www.cdsco.nic.in

 

Introduction:

 

The Drugs and Cosmetics Act, 1940 along with the Drugs and Cosmetics Rules, 1945 (“Rules”) made thereunder regulate the manufacturing, import, circulation and trade of the drugs and cosmetics industry in India. The objective of these laws is to protect the consumers from sub-standard, illegal and harmful drugs or cosmetics and prescribe detailed procedures to be adopted for their manufacturing, packaging and sale in India.

 

Import of manufacture of new drug for clinical trials or marketing:

 

PART XA of the Rules deals with import of manufacture of new drug for clinical trials or marketing. As per the Rules for the import of new drugs, prior approval is required to be obtained from the Licensing Authority established under the Rules. The said Rule prescribes inter alia the procedures for applying for the said approval.

Permission for import of drugs:

 

Once the Licensing Authority is satisfied as to the safety of the drug to be imported as raw material (bulk drug substance) or as finished formulation it may issue an import permission in the prescribed forms, subject to the conditions stated therein.

 

The Permission as may be granted will be subject related to the condition related to composition, packaging, labelling etc. mentioned therein. One such condition is that “Specimen of the carton, labels, package insert that will be adopted for marketing the drug in the country shall be approved from the Licensing Authority before the drug is marketed.” [1]

 

The Draft Drugs and Cosmetics (Amendment) Rules, 2018

 

Recently the Central Government after consultation with the Drugs Technical Advisory Board proposed amendment to the Rules. The Draft Drugs and Cosmetics (Amendment) Rules, 2018 proposes to add another condition in the license granted under Form 45, Form 46 etc. making inclusion of package inserts in each saleable unit to be provided to the consumer compulsory. This proposed amendment appears to be in the interests of consumers as it would ensure that consumers are aware of the details and instructions accompanying the drug.

 

The Rules once notified are likely to come into force from January 2019.

 

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[1]Drugs and Cosmetics Rules, 1945 Form 45/ 46- Conditions for License

 

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Validity and Authentication of AADHAAR: much-awaited judgment by Hon’ble Supreme Court of India

 

 

Source: www.sci.gov.in

 

 

 

The Supreme Court of India’s constitutional bench comprising Hon’ble CJI Dipak Misra, Hon’ble A.K. Sikri and Hon’ble A.M. Khanwilkar, JJ. have pronounced a detailed judgment[1] in the matter of Aadhaar. By majority judgment, it has been held that:

 

  1. "The requirement under Aadhaar Act to give one's demographic and biometric information does not violate fundamental right of privacy.

  2. The provisions of Aadhaar Act requiring demographic and biometric information from a resident for Aadhaar Number pass three¬fold test as laid down in Puttaswamy case, hence cannot be said to be unconstitutional.

  3. Collection of data, its storage and use does not violate fundamental Right of Privacy.

  4. Aadhaar Act does not create an architecture for pervasive surveillance.

  5. Aadhaar Act and Regulations provides protection and safety of the data received from individuals.

  6. Section 7 of the Aadhaar is constitutional. The provision does not deserve to be struck down on account of denial in some cases of right to claim on account of failure of authentication.

  7. The State while enlivening right to food, right to shelter etc. envisaged under Article 21 cannot encroach upon the right of privacy of beneficiaries nor can former be given precedence over the latter.

  8. Provisions of Section 29 is constitutional and does not deserves to be struck down.

  9. Section 33 cannot be said to be unconstitutional as it provides for the use of Aadhaar data base for police investigation nor it can be said to violate protection granted under Article 20(3).

 

  1. Section 47 of the Aadhaar Act cannot be held to be unconstitutional on the ground that it does not allow an individual who finds that there is a violation of Aadhaar Act to initiate any criminal process.

  2. Section 57, to the extent, which permits use of Aadhaar by the State or any body corporate or person, in pursuant to any contract to this effect is unconstitutional and void. Thus, the last phrase in main provision of Section 57, i.e. “or any contract to this effect” is struck down.

  3. Section 59 has validated all actions taken by the Central Government under the notifications dated 28.01.2009 and 12.09.2009 and all actions shall be deemed to have been taken under the Aadhaar Act.

  4. Parental consent for providing biometric information under Regulation 3 & demographic information under Regulation 4 has to be read for enrolment of children between 5 to 18 years to uphold the constitutionality of Regulations 3 & 4 of Aadhaar (Enrolment and Update) Regulations, 2016.

  5. Rule 9 as amended by PMLA (Second Amendment) Rules, 2017 is not unconstitutional and does not violate Articles 14, 19(1)(g), 21 & 300A of the Constitution and Sections 3, 7 & 51 of the Aadhaar Act. Further Rule 9 as amended is not ultra vires to PMLA Act, 2002

  6. Circular dated 23.03.2017 being unconstitutional is set aside.

  7. Aadhaar Act has been rightly passed as Money Bill. The decision of Speaker certifying the Aadhaar Bill, 2016 as Money Bill is not immuned from Judicial Review.

  8. Section 139¬AA does not breach fundamental Right of Privacy as per Privacy Judgment in Puttaswamy case.

  9. The Aadhaar Act does not violate the interim orders passed in Writ Petition (C) No. 494 of 2012 and other Writ Petitions.”

However, Hon’ble D.Y. Chandrachud and Hon’ble Ashok Bhushan, JJ. have given a separate judgment dissenting on a few points.

 

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[2]Supreme Court judgment in Writ Petition (Civil) No. 494 OF 2012 and connected matters delivered on September 26, 2018

 

 

 

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India: Supplier liable for not passing GST benefits

 

 

Source: www.incometaxindia.gov.in

 

 

Goods and Services Tax (hereinafter referred to as “GST”) is a single tax on the supply of goods and services. The dual system of taxation levied on the consumption of goods/ services at the Central as well as State levels is applicable only on value addition at each stage. With the objective of avoidance of multiple taxation and enhancement of clearer administration of the system to prevent tax evasion, GST comes forward as a pragmatic tax regime.

 

Liability for not passing on GST benefits

 

The "anti-profiteering" measures enshrined in the GST law provide an institutional mechanism to ensure that the full benefits of input tax credits and reduced GST rates on supply of goods or services flow to the consumers.

 

The National Anti-Profiteering Authority (hereinafter referred to as “NAA”) has been established by the Government, with the objective to ensure that the benefits of implementation of GST in terms of lower prices of the goods and services reach the consumers. In the event the NAA confirms there is a necessity to apply anti-profiteering measures, it has the authority to order the supplier / business concerned to reduce its prices or return the undue benefit availed by it along with interest to the recipient of the goods or services. Further, it may impose a penalty on the defaulting business entity and even order the cancellation of its registration under extreme circumstances.[1]

 

 

In a forward-looking judgement [2] dated September 7, 2018, the NAA ruled that the suppliers would be held liable for not passing on the benefits of GST rate reduction on the sale of goods.

 

In the aforesaid matter it was alleged that a supplier/ business entity- M/s Sharma Trading Company had not passed on the benefit of reduction in the rate of tax (from 28% to 18%) by lowering the price of a product - Vaseline when the same was purchased on November 15, 2017.

 

It was observed that despite the reduction in the rate of GST, there was no reduction in the sale price rather the base price was increased thus amounting to illegal profiteering and contravening the provisions of CGST Act, 2017 (Section 171). The supplier in the recent case was held to be bound by the GST registration norms requiring him not to charge the enhanced base price resulting in negation of tax lowering. Also, it was mandatory for the supplier displayed the revised MRP as per the provisions of the Legal Metrology (Packaged Commodity) Rules, 2011.

 

The NAA ordered the supplier to reduce the prices and return to the consumer the amount of profiteering in terms of tax @ 18% interest.

 

By the ruling stated above, NAA reposes faith and confidence amongst the consumers that they would not be made subject to the illegal profiteering of the suppliers in conscious disregard of their obligations stated under law.

 

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[1]http://pib.nic.in/newsite/PrintRelease.aspx?relid=173564 
[2]http://www.naa.gov.in/docs/1536558206sharma_tt.pdf 

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 India: Incentivisation of Electric Vehicles

 

 

 

 

The Government has accelerated its efforts towards encouragement of environmentally conducive options in the country. Aiming to revolutionize the automobile sector by adoption of practices reducing environmental pollution, the Government looks forward to the introduction of policy on electric vehicles and alternative fuel technology to give a thrust to e-mobility in the country.

 

Efforts so far …

 

In the spree to endorse the increased usage of electric vehicles, some of the steps taken by the Government are stated below:

  • The Faster Adoption and Manufacturing of Hybrid & Electric Vehicles (hereinafter referred to as “FAME”) was launched in 2015 under National Electric Mobility Mission market development and its manufacturing eco-system in the country in respect of environmental-friendly vehicles. [1]

  • It plans to provide INR 1,000 crore as subsidy for building a nationwide charging infrastructure for electric vehicles as it seeks to expedite the roll-out of India’s ambitious EV programme. [2]

  • It has exempted the requirement of any permits in order to encourage the use of vehicles which do not pollute the environment. [3]

  • It has provided GST at 12 % with respect of electric vehicles.

  • It has been promoting investment in the electric vehicles manufacturing sector. [5]

Latest Approach …

 

While aiming towards the attainment of the objective of inducing more electric vehicles in the transportation system, the Government is working to bring forward schemes and policies to incentivise the local production of lithium-ion batteries. [5]

 

This will not only lower the cost of production of electric vehicles in India making them affordable by the customers but will also serve as a profitable business opportunity for the entrepreneurs while generating employment and fulfilling the aspect of ‘Make in India’.

 

The Government takes yet another step towards its progressive vision to make a pollution free nation by taking recourse to resources which do not harm the environment.

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[1]https://www.livemint.com/Industry/h6L29E034RB20kW17GqAXN/Govt-extends-FAME-scheme-by-6-months.html 
[2]https://www.livemint.com/Industry/gPQkdVveA5yWzXzit3iQFL/1000-crore-subsidy-likely-for-EV-charging-infrastructure.html 
[3]https://economictimes.indiatimes.com/news/economy/policy/end-of-permit-raj-for-electric-alternative-fuel-vehicles/articleshow/65711728.cms 
[4]https://auto.economictimes.indiatimes.com/news/industry/govt-to-soon-launch-ev-and-alternate-fuel-policy-pm/65719146 
[5]https://www.livemint.com/Industry/JQyksIjj8vPPZsppfzBdfM/PMO-for-incentives-to-lithiumion-batteries-over-electric-ve.html 

 

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