Corporate Law Newsletter Volume III, Issue 49

December 4, 2018
ISSUE No. 49
December 04, 2018



India: Easier tax refund for Exporters

Government of India(GOI)


The faster growing economy of the nation is attributable to the numerous efforts made by the Government in facilitating trade in the country. Introduction of the policies such as “Startup India”, “Standup India” and “Skill India” have focussed on supporting the growth and development of the commercial sector of the nation. 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.

The Export Business

Conducting business across the borders has always been a profitable source of elevating the income sources. The export of goods and services from India to foreign nations since ancient times has fetched good repute and revenue. India has a comprehensive institutional set up to promote international trade. The Government has encouraged the export business of the Indian entities by bringing out regulations and policies benefiting such exporters. A number of products are exported from India which include jute, tea, cotton, spices, engineering goods, refined petroleum, gems, jewellery, chemicals, agricultural products, textiles, etc.

The Foreign Trade Policy (2015-2020) of the country has the objective of developing export potential, improving export performance and foreign trade and creating favorable balance of payments position. 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.

Challenges faced

The prevalent tax refund mechanism has been taking a toll on the exporters in India covered under the provisions of the Goods and Services tax (hereinafter referred to as “GST”), some of which are listed below:

  • Delay in refund under GST impacts business and raises working capital cost;

  • State tax authorities lacking familiarity with some export schemes;

  • Technicals hurdles owing to minor issues such as ambiguity with respect to the jurisdiction of the officers;

  • Input tax credit mechanism still requires streamlining.

Probable Solutions

The Government may soon propose solutions to the challenges confronted by the exporters in the nation by simplifying the process of refund of tax to them.[1] The Government is expected to provide a reconciliation mechanism for exporters to understand against which claims they have received the refund amount for integrated GST rebate claim. Procedural relaxations shall make refunds seamless and easier and thereby facilitating carrying out the business activities by the businesspersons.




India: Corporate Social Responsibility Amendment enforced

Ministry of Corporate Affairs (MCA services)


Corporate Social Responsibility (hereinafter referred to as “CSR”) is one of the methods whereby the companies pay back to the society by making their contribution for the welfare of mankind. As per the European Union, it “is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”. Corporate Social Responsibility ascertain the socio-economic and environmental welfare of the society while balancing the interests of the corporates.

CSR- A responsibility

Introduced under the provisions of Section 135 of the Companies Act, 2013 (hereinafter referred to as the “Act”), the Government makes it mandatory for certain class of profitable enterprises to spend a share of their profits on social activities by the way of a dedicated procedure of CSR. The welfare causes may include acts as eradication of hunger/ malnutrition or poverty, promoting healthcare and sanitation, supporting education and employment enhancing vocational skills, encouraging gender equality, ensuring sustainability, protecting heritage, working for the benefit of armed forces, fostering training for sports, contribution for relief projects, etc.

Following companies are required to constitute a CSR Committee for the enforcement of the policy in the said regard:

  1. having net worth of Rupees Five Hundred crore or more, or
  2. having turnover of Rupees One Thousand Crore or more or;
  3. having a net profit of Rupees Five Crore or more

Amendment to CSR provisions

The Ministry of Corporate Affairs vide its notification dated September 19, 2018, allowed the enforcement Section 37 of the Companies (Amendment) Act, 2017 (hereinafter referred to as the “Amendment Act”) whereby amendment to covered under Section 135 of the Act[1] stating that:

  • Where a company is not required to appoint an independent director as per the Act, it shall have in its CSR Committee two or more directors [Proviso to Section 135(1)];
  • For the purpose of computation of net profits in furtherance of the CSR credit shall be given to bounties and subsidies received from any Government or any public authority in accordance with the provisions of Section 198 of the Act. [Explanation to Section 135(5)].

CSR is a means which permits the corporates to function in an ethical and sustainable way and deals with its environmental and social impacts. It helps determine a careful consideration of human rights, the community, environment, and society in which it operates. By the way of incorporation of changes in the present regulatory framework governing CSR, the Government aims to make sure effective and mandatory compliance of the companies towards their social obligations towards the society making them responsible corporates.





India: Amendments to Limited Liability Partnership Rules

The Ministry of Corporate Affairs is an Indian government ministry

India being a favoured business destination houses a number of opportunities for the growth and development of the industrial sector. In order to facilitate the carrying out of business activities of varied nature, the Indian legal system allows a number of business structures such as proprietorship, partnership, companies and limited liability partnership (hereinafter referred to as “LLP”).

Limited Liability Partnership

A LLP is a business arrangement whereby the liability held by each of the partners is limited by law. The LLP business vehicle is a legal entity having its existence independent from its partners where their rights and duties are determined in terms of the agreement between them.

The formation as well as regulation of LLP is governed under the provisions of the Limited Liability Partnership Act, 2008 (hereinafter referred to as the “Act”) and the Limited Liability Partnership Rules, 2009 (hereinafter referred to as the “Rules”).

Amendment to the LLP provisions

In furtherance to the notification dated September 18, 2018, issued by the Ministry of Corporate Affairs, the Government has introduced the Limited Liability Partnership (Second Amendment) Rules, 2018, and some of changes introduced therein have been stated below:

  • Form 1 has been replaced by RUN-LLP Form and Form 2 has been replaced by FiLLiP Form;

  • The LLPs are required to submit the below stated forms to the Registrar, Central Registration Centre for processing [Regulation 3(3) of the Rules]:
    • Reserve Unique Name LLP (RUN-LLP);
    • Incorporation of LLP (FiLLiP);
    • Notice of name change (Form 5);
    • Conversion of a firm into LLP (Form 17);
    • Conversion of private/ unlisted company into LLP (Form 18)
  • The incorporation of LLP shall be filed in Form FiLLiP with the Registrar having jurisdiction over the state in which the registered office of the limited liability partnership is to be situated along with requisite fee [Regulation 11(1) of the Rules];
  • Where the Registrar, on examining Form FiLLiR finds that it is necessary to call for further information or finds such application or document to be defective or incomplete in any respect, he shall give intimation to the applicant to remove the defects and re-submit the e-form within 15 days from the date of such intimation given by the Registrar [Regulation 11(2) (a) of the Rules];
  • After re-submission of the document, if the Registrar still finds that the document is defective or incomplete in any respect, he shall give one more opportunity of 15 days’ time to remove such defects or deficiencies [Regulation 11(2) (b) of the Rules];
  • The Certificate of Incorporation of limited liability partnership shall be issued by the Registrar in Form 16 [Regulation 11(3) of the Rules];
  • Every application shall be made through the web service, RUN-LLP, available at and be accompanied by requisite fee, which may either be approved or rejected, as the case may be, by the Registrar after allowing a re-submission of such application within 15 days for rectification of defects [Regulation 18 (5) of the Rules].

Changes have been introduced in the incorporation and regulation of the LLPs in India in order to ease out their business activities and helping them to prove as a suitable organization model.



India: Supreme Court all the laws of India under One Domain

Indian government ministry


The increasing digitalization in the country has allowed the availability of knowledge and information to be easily available. Internet connects multiple users across the virtual platform to the resource mine helping facilitate them understand and avail necessary educational material or matters of current news with their implications.

Legal system

The development of a nation depends upon the strength of its legal framework and reliance of its effective implementation by properly equipped meticulous experts.

The Indian legal system is one of the most exhaustive and intricate legal systems in the world. Codified into numerous domains, the regulatory framework lays down the guidelines for efficient control and management within the country.

Organized legal system

The legislature in India provides for a number of rules and regulations governing the conduct of citizens in the nation. Although, as many as 1,000 central laws are available, the difficulty arises in finding all of them on a single unified platform.

In furtherance to the order of the High Court of Delhi, in a writ petition filed by Vansh Sharad Gupta seeking online access to Indian laws, the Government is in the process of organizing all laws in India by collating them onto a single e-portal- India Code : The guidelines issued by the Court require the online portal to fulfil the below stated requisites:

  • Organization of all central laws, subsidiary acts, rules, regulations, procedures, notifications and circulars;
  • The content should be in machine readable PDF format;
  • The navigation on the portal aims to be such that the complete law-making process, from the parent Act to the subordinate legislations, are clearly visible;
  • Uploading of State Government Acts, rules, regulations, and subordinate legislations as well;
  • Mobile friendly view;
  • All ministries and departments must have a nodal officer for this exercise.

The High Court of Delhi via its pragmatic approach, has introduced organization and systematic arrangement of legal regulations on a single online platform which not only facilitates the users of the cyberworld to get access to all the laws of the country but also assures that authentic data is available to the citizens.



India: Mandating Sports in Education Curriculum

The Supreme Court of India


Breaking the monotony of the routine, sports are a source of entertainment, destressing the individuals from their routine activities. Played in numerous forms, varying from those deploying physical activities to the ones involving strategizing instincts, these games have always been a part of the schedule of human life. Internationally also pressure is seen to compete among themselves to prove superiority. These activities inculcate a sense of discipline, self-confidence, time management team building, cooperation of sportsmanship. Then there are international games and events where most of the nations participate. Despite numerous advantages attributable to the sports, there still remains a very limited interest towards it.

Growing concern…

It is very rightly said “All work and no play makes Jack a dull boy”, in the fanatic spree of achieving academic excellence. In India encouragement of sports requires a wider parameter to cover. While the Government is consistently putting in efforts to build up a strong infrastructure for the growth and development of sports in the country, there is still a long way to go to change the stereotypical mindset that such activities are merely recreational and there is no necessity to incorporate them in the regular lifestyle. The neglect of development of passion towards sports activities deprives a child to complete his/ her development.

Finding solutions…

  • The Government launched the Khelo India to revive the sports culture in India at the grass-root level by building a strong framework for all sports played in our country and establish India as a great sporting nation. It can be achieved if all stakeholders – from institutions to authorities and sportspersons work with dedication and missionary zeal.
  • United Nations Educational, Scientific and Cultural Organization (hereinafter referred to as “UNESCO”) had introduced the International Charter of Physical Education and Sports, 1978 which was revised it in 2015 amending in tune with modern day requirements and changing lifestyles. As per the said charter, “Every human being has a fundamental right of access to physical education and sport, which are essential for the full development of his personality. The freedom to develop physical, intellectual and moral powers through physical education and sport must be guaranteed both within the educational system and in other aspects of social life.”
  • A Public Interest Litigation has been filed before the Supreme Court seeking its directions to Centre and States for making sports compulsory in educational curriculum from elementary to higher education and to pronounce right to sports as a part of fundamental rights on the lines of right to education. The apex Court issued notice to Centre, University Grants Commission, National Council of Educational Research and Sports Authority of India requiring their response as to whether sports could be treated as part of fundamental rights to make.

With the increasing awareness about the importance of sports and their deficiency in the academic schedule being detrimental to the students deteriorating the quality of life, there has been an increased concern regarding the overall development of the youth. The aforesaid petition may pave way for sports being a mandatory part of the educational curriculum relying on the principles laid down by the UNSECO. This may not only bring sports as an additional academic course but also foster it as a career option.



India: eSports players are legit sports athletes

The Asian Games



The online gaming industry continues to rapidly grow and is gaining much recognition worldwide.

eSports at Asian Games

At the Asian Games 2018, the following 6 games featured at the event under the category of eSports, namely:

  • Arena of Valor;
  • Clash Royale;
  • Hearthstone;
  • League of Legends;
  • Pro Evolution Soccer; and
  • Starcraft II

It is pertinent to note that at the Asian Games 2018 event, eSports was featured as a demonstration event and the medals won in respect of above-named gaming events were not be counted in the overall medal tally however, the eSports gaming is set to be featured as a medal event as the Asian Games 2022

Given that Asian Games are the second biggest sporting tournament in the world after the Olympics, it can be said the popularity of eSports is fast growing and being featured at the event amounts to the biggest recognition of competitive gaming industry.

eSports industry body

The rise of eSports industry has given rise to many eSports organisations as well.

The International Esports Federation, established in 2008 and based in South Korea, defines eSports as “a competitive sport performed in a virtual environment in which physical and mental abilities are exercised to create victory conditions through generally accepted rules.” It states that its obligations apart from striving for worldwide recognition of esports include hosting international esports tournaments and establishing standards for referees, players, certifications, titles and competitions.

The Indian Federation of Sports Gaming (hereinafter referred to as ‘IFSG’) was formed in 2017 with the aim of creating a thriving ecosystem for users & gaming operators by laying guidelines for a common set of practices, setting standards of operation and creating a regulatory framework to protect the interests of the user and the gaming operator. It is India’s first and only Sports Gaming self-regulatory industry body formed to protect consumer interests and create standardized best practices in the Sports Gaming industry.

It is also worth noting that in the event a gamer/ eSports athlete is aggrieved by the operations of a Sports Gaming operator or a Sports Gaming Company, complaint against the Sports Gaming operator/ company including complaints with respect to offensive/misleading advertising can be filed with the official IFSG Customer Complaint Cell at

Rise of the eSports Industry:

India has already recognized that online sports games that require considerable skill, judgment and discretion are games of skill and not gambling. It has basically paved the way the rise of eSports industry domestically as well as looks set to play a major role in the recognition of eSports worldwide.

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