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KANTH AND ASSOCIATESAttorneys and International Legal Consultants

K & ANewsletter

NEWS ALERTS

Railway passenger fares and freight charges will not go up immediately as the Finance Ministry issued a notification exempting the railways from 12% service tax for three months till September 30, 2012. Government has exempted the core services provided by the Indian Railways, namely, transportation of goods and passengers, from the levy of service tax. The exemption will remain effective for a period of 3 months, up to September 30, 2012.

Central Board of Direct Taxes (CBDT) has issued a notification vide which e-filing has been made compulsory for assessment year, 2012-13 onwards for an individual or a Hindu undivided family, if his or its total income, or the total income in respect of which he is or it is assessable under the Act during the previous year, exceeds Rupees Ten Lakh; an individual or a Hindu Undivided Family (HUF), being a resident, having assets (including financial interest in any entity) located outside India or signing authority in any account located outside India and required to furnish the return in Form ITR-2 or ITR-3 or ITR-4. However, digital signature will not be mandatory for these taxpayers and they can also transmit the data in the return electronically and thereafter submit the verification of the return in Form ITR-V.

Filing of returns electronically under digital signatures is already mandatory for any company required to furnish the return in Form ITR-6 or a firm required to furnish the return in Form ITR-5 or an individual or HUF required to furnish the return in Form ITR-4 and to whom provisions of section 44AB are applicable.

The Authority of Advance Rulings (AAR) has said that the tax residency certificate given by Mauritius authorities is adequate to avail tax benefits under the India-Mauritius tax treaty and rejected tax authorities attempt to apply principles of anti-avoidance akin to proposed General Anti- Avoidance Rules. This gives

TAX

Service tax exemption to rail fares and freight till 30.09.2012

E-filing of Income Tax returns mandatory

Tax Residency Certificate adequate to avail benefits

CONTENTS

Corporate, Capital Market & Foreign TradeLegislations/Notifications 3Judgments 3

— Article 4

— News AlertsTax 1

1

Curbing Doping in SportsBy Mr. Sukomal Satyen, Associate, K&A

much needed respite to investors using Mauritius to route their investment in India after the AAR, in some past rulings, applied principles of anti avoidance to disregard the form of certain transactions, particularly the use of tax residency certificate. India-Mauritius tax treaty says capital gains made on investments in India can only be taxed in the island nation. However, Mauritius does not levy any tax making it an attractive destination to route investments in India. In a landmark judgment in the Union Government Vs Azadi Bachao Andalolan, the Supreme Court held that a tax residency certificate given by Mauritius was enough to avail tax benefits under the India-Mauritius tax treaty. Recent rulings by the authority impliedly applying GAAR provisions to the transactions before April 1, 2013 had create some doubt in the minds of the foreign investors over the applicability of tax residency certificate to avail tax benefit under India-Mauritius tax treaty.

The Supreme Court directed the Reserve Bank of India (RBI) not to allow foreign law firms to open liaison offices in the country. The order was passed on an appeal filed by the Bar Council of India against a judgment of the Madras High Court that allowed foreign advocates to visit India to offer legal advice to their clients. The Supreme Court in an interim order directed that the RBI shall not grant any permission to foreign law firms to open liaison offices in India under section 29 of the Foreign Exchange Regulation Act, 1973. It also clarified that under section 29 of the Advocates Act, 1961, the term practice covers consultation, legal drafting and all other non-litigious matters, besides litigious matters.

CORPORATE, CAPITAL MARKET & FOREIGN TRADE

Foreign law firms can't open liaison offices in India


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RBI rationalizes customer charges for NEFT

DTA between India & Jersey

Amendment in forms 8, 10 & 17

The Reserve Bank of India (RBI) has, in consultation with the stakeholders, rationalized charges that banks can levy on customers for transfer of funds through National Electronic Funds Transfer (NEFT). Now banks can levy not more than Rs.2.50/- (exclusive of service tax) for funds transfer up to Rs.10,000/-. Charges for transfers beyond this limit would remain unchanged, that is, Rs.5/- for transfers between Rs.10,001 to Rs.1,00,000/-; Rs.15/- for transfers between Rs.1,00,000/- and above and up to Rs.2,00,000/-; and Rs.25 for transfers beyond Rs.2,00,000/-. These charges would become effective from August 1, 2012.

A Double Taxation Agreement between the Government of the Republic of India and the Government of Jersey for the exchange of information and assistance in collection with respect to taxes was signed at London

rdon the 3 day of November, 2011. The date of entry into th

force of the said Agreement was 8 day of May, 2012, being the date of the later of the notifications of completion of the procedures as required by the respective laws for entry into force of the said Agreement.

Thus, the Central Government in view of the aforesaid and in exercise of the powers conferred by section 90 of the Income-tax Act, 1961, vide notification dated 10.07.2012, has notified that all the provisions of the said Agreement between the Government of the Republic of India and the Government of Jersey for the exchange of information with respect to taxes, as set out in the Annexure thereto, shall be given effect to in

ththe Union of India with effect from the 8 May, 2012, that is, the date of entry into force of the said Agreement.

The Central Government, in exercise of the powers conferred by sub-section (1) of section 642 read with section 610B of the Companies Act, vide notification dated 19.07.2012 made rules to amend the Companies (Central Government's) General Rules and Forms, 1956 whereby Form 8, 10 and 17 have been amended. It has been laid down that the said rules may be called the Companies (Central Government's) General Rules and Forms (Fourth Amendment) Rules, 2012 and these rules

ndshall come into force with effect from the 22 July, 2012.

The Ministry of Corporate Affairs vide circular dated 21.06.2012 had imposed fees on Form 23B (Information by auditor to Registrar) with effect from.22.07.2012. The last date for filing the Form 23B without fee has been extended for two weeks. The fee shall be charged

thon any eForm 23B filed on or after 5 August, 2012.

In exercise of the power conferred by section 642 read with Sub-section (2) of section 637A of the Companies Act, 1956, the Central Government made the Company Law Board (Fees on Application and Petitions) (Amendment) Rules, 2012 to amend the Company Law Board (Fees on Application and Petitions) Rules, 1991. It amends schedule of Company Law Board (Fees on Application and Petitions) Rules, 1991.

An Agreement and the Protocol between the Government of the Republic of India and the Government of the Republic of Estonia for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income was

thsigned at Tallinn, Estonia, on 19 day of September, 2011. The date of entry into force of the said Agreement

this 20 day of June, 2012, being the date of the later of the notifications of completion of the procedures as required by the respective laws for entry into force of the said Agreement.

The Central Government, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961, has directed that all the provisions of the said Agreement shall be given effect to in the Union of India

stwith effect from 1 day of April, 2013.

An Agreement and the Protocol between the Government of the Republic of India and the Government of the Republic of Lithuania for the Avoidance of Double Taxation and the Prevention of

Last date to file Form 23B without penalty extended by 2 Weeks

Company Law Board (Fees on Application and Petitions) (Amendment) Rules, 2012

DTAA between India and Estonia

DTAA between India and Lithuania




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Fiscal Evasion with Respect to Taxes on Income and on th

Capital (DTAA) was signed at New Delhi on 26 July, 2011. The date of entry into force of the said Agreement

this the 10 July, 2012, being the date of the later of the notifications of completion of the procedures as required by the respective laws for entry into force of the said Agreement.

The Central Government, in exercise of the powers conferred by section 90 of the Income-tax Act, 1961, has directed that all the provisions of the said Agreement shall be given effect to in the Union of India

stfrom 1 day of April, 2013.

The Central Government, vide notification dated 10.07.2012, has delegated to the Registrar of Companies, the powers and functions vested in it under Section 21, Section 25, proviso to sub section (1) of Section 31, sub section (1D) of Section 108 and Section 572 of the Companies Act, 1956 subject to condition that the Central Government may revoke such delegation of powers or may itself exercise the powers and functions under the said sections, if in its opinion such a course of action is necessary in the public interest.

The powers and functions under sub-section (1D) of section 108 shall be exercised and performed either by the Registrar of Companies of the State in which the registered office of the Company is situated, or by the Registrar of Companies of the State in which the applicant ordinarily resides.

This notification shall come into force with effect from th

12 August, 2012.

The Ministry of Corporate Affairs, Central Government, vide notification dated 10.07.2012 and in exercise of the powers conferred by sub-section (3) of section 1 of the Limited Liability Partnership Act, 2008, has notified Section 51, 63, 64 and 65 of the Limited Liability Partnership Act, 2008.

LEGISLATIONS / NOTIFICATIONS

Delegation of powers of Central Government to Registrar of Companies

Sections 51, 63, 64, 65 of LLP Act, 2008 notified



EPFO to launch Special Recovery Drive

Criminal Law (Amendment) Bill, 2012 to make laws on sexual assault more stringent

Employer has no implied right to transfer employee from one office to another: Delhi HC

thEPFO issues an internal circular dated 13 July, 2012 on

st thSpecial Recovery Drive from 1 August, 2012 to 30 September, 2012. The said circular reiterates the launching of the special recovery drive to recover the arrears of provident fund from both un-exempted and exempted establishments and the actions that would be taken against the defaulting establishments under the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.

The Union Cabinet has provided its nod to stringent punishment for sexual assault and has approved the introduction of the Criminal Law (Amendment) Bill, 2012, in Parliament to broaden the scope of the legal offence of sexual assault to ensure more stringent punishments for sexual offences including rape. The Bill envisages making rape a gender-neutral offence by replacing the word 'rape' with the phrase 'sexual assault'. The Bill includes substituting various sections of the Indian Penal Code, 1860, replacing the word 'rape' wherever it occurs by the words 'sexual assault' to make the offence of sexual assault gender neutral. The Union Cabinet also announced to widen the scope of the offence of sexual assault.

The management of a company vide a writ petition challenged the award of the Industrial Tribunal whereby the transfer of a workman from one office of the Company to its other office had been held to be illegal. The workman was employed and initially posted at one office of the company and was transferred to another office due to exigency of service. The Industrial Tribunal came to the conclusion that the transfer of the workman was not justified since it was not a term of his contract of employment that he could be transferred from one place to another and that the certified standing orders which were being relied upon by the company in support of its defence under the Industrial Employment (Standing Orders) Act, 1946 providing for transfer of all its employees from one office to other, either within the State or even outside, were not

JUDGMENTS


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applicable to the said workman as he was not made aware of the same.

It was argued by the company that the right to transfer an employee is implicit in every contract of service and therefore, the workman could still be transferred from one office of to another. However, this argument was not accepted in view of the decision of the Supreme Court in “Kundan Sugar Mills Vs Ziyauddin and others”, AIR 1960 SC 650 wherein similar contention raised on behalf of the employer was rejected by the Supreme Court by observing that the right to transfer is implicit in very contract of service is too wide the mark.

Thus, it was held by the Hon'ble Court that the employer has no implied right to transfer employee from its one office to another in absence of any express agreement between the parties wherein the company had a right to transfer the workman from one office to another.

ARTICLE

“Doping in Sports” is termed as deliberate or inadvertent use by an athlete of a substance or method banned by the International Olympic Committee (the “IOC”) and World Anti Doping Agency. Throughout the years, the attitude towards curbing of doping in sports was indifferent with different countries adopting separate rules and guidelines without any harmonization or unification to curb doping in sports..

The Convention against Doping was adopted by the Council of Europe on 16 November 1989 (the “Anti-Doping Convention”). On 18 June 1995, the IOC Medical Code was adopted by the IOC Session, which remained in force until 31 December 1999. In February 1999, the IOC convened the World Conference on Doping in Sport in Lausanne, Switzerland. The Lausanne Declaration on Doping in Sport recommended creation of an International Anti-Doping Agency resulting in formation of World Anti-Doping Agency (“WADA”) in Lausanne, Switzerland. Among others, one of the

CURBING DOPING IN SPORTS

INTRODUCTION

CREATION OF REGULATORY BODIES & RULES

By Mr. Sukomal Satyen, Associate, K&A

mandates of WADA was to harmonize the Olympics anti doping code and develop a single code which would be applicable and acceptable to all stakeholders. From 1st January 2000 until July 2003, the Olympic Movement Anti-Doping Code (the “OMAC”) was in force. It successfully achieved a step towards harmonization and unification of regulation of doping in Olympics in particular and sports in general. In March 2003, the World Anti-Doping Code was adopted at the

1Copenhagen Conference. However, in contrast to the Olympic Movement, the governance structure of WADA included representatives from public authorities as well.

The World Anti-Doping Agency (WADA) with its headquarters at Montreal (Canada) primarily endeavors to promote health, fairness and equality for athletes worldwide by working to ensure harmonized, coordinated and effective anti-doping programs at the international level. At the national level, in India, it is achieved through the stakeholder relationships, with regard to detection, deterrence and prevention of doping. WADA annually publishes the List of Prohibited Substances and Methods which is a mandatory list to be followed by all the Athletes and Sports person irrespective of their nationality. The list defines what is prohibited in-competition and out-of-competition. The list also indicates prohibition of a particular substance in certain sports Apart from the substances mentioned in the WADA List of Prohibited Substances all substances pharmacologically classified as a stimulant are also by definition prohibited

The World Anti-Doping Code (the “Code”) is the First document that harmonizes regulations regarding anti-doping in sport across all sports played by all sport persons belonging to the signatory countries of the world. The Code provides a framework for anti-doping policies, rules, and regulations for sport organizations and public authorities to create a level playing field for all athletes worldwide. The Code also includes creation of several International Standards (IS). The purpose of each IS is harmonization among anti doping organizations. The ISs were developed for Laboratories, Testing, the Prohibited List, and for Therapeutic Use Exemptions (TUE). Most of the provisions of the Code

WORLD ANTI DOPING AGENCY

WORLD ANTI DOPING CODE

2.

3.


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had to be mandatorily incorporated by the Countries in their respective anti-doping codes. The participating national governments have assumed a legal obligation to implement and enforce the Code and its International Standards by signing the United Nations International Convention against Doping in Sport (the “UNESCO Convention”).

In India the National Anti-Doping Agency (“NADA”) is the national organization responsible for promoting, coordinating, and monitoring the doping control programme in sports in all its forms in the country. NADA works towards a vision of 'Dope Free Sport in India'. The primary objectives undertaken by NADA are:

- Adopting and implementing anti-doping rules and policies which conform with the World Anti-Doping Code,

- Cooperating with other sports related organizations and other anti-doping organizations,

- Encouraging reciprocal testing between National Anti-Doping Organizations, and

- Promoting anti-doping research & education

- Tie up with the customs authorities to detect the import of such banned food supplements /drugs.

- Track movement of drugs in and around the campus area of Training Centers.

- Counseling of the players.

- Surveillance of coaches, doctors and support staff through their employers.

- Conduct frequent searches of room/s of the players, coaches and support staff.

As per the Code, the athletes are responsible whenever a prohibited substance is found in their bodily specimen. For purposes of anti-doping rule violations involving the presence of a Prohibited Substance (or its Metabolites or Markers), the Code adopts the rule of strict liability which was borrowed from the OMAC and the vast majority of pre-Code anti-doping rules. This

4

ANTI DOPING-AGENCY IN INDIA

ATHLETES RESPONSIBILITY: STRICT LIABILITY

implies that the violation occurs whether or not the Athlete intentionally or unintentionally used a Prohibited Substance or was negligent or otherwise at fault. If the positive Sample came from an In-Competition test, then the results of that Competition are automatically invalidated as per Article 9 of the Code which mentions about Automatic Disqualification of Individual Results) The strict liability rule in doping law has been called the cornerstone of anti doping programmes. According to this approach there is no need for an authority to prove that the athlete intended to enhance their performance, simply showing that a prohibited substance was present in their body is sufficient to prove that doping has been committed. Similar to the Court of Arbitration of Sports (CAS) judgment titled as Torri Edwards, CAS OG04/003, in many other cases CAS has upheld that “it would put an end to any meaningful fight against doping if an athlete was able to shift his/her responsibility with respect to substances which enter the body to someone else and avoid being sanctioned because the athlete himself/herself did not know of that substance.” And yet there is a certain set of cases in which the application of such an approach seems perverse and has attracted severe criticism as it breaches Athlete's right to Personality. The argument in favour of the strict liability approach is that in the fight against doping in sports and to provide an equal platform for the athlete to compete in a fair environment based on their true potential and stamina requires the mandate of strict liability approach. However apart from the legal responsibilities imposed upon the athletes, the self imposed moral responsibility and obligation of the athletes towards dope free sports is also warranted.

The effective implementation of the Code is however subject to inter alia the following challenges:

The differing economic background and social status of different athletes coupled with ineffective and incomplete training especially aspects related to prohibited substances as per the Code.

In certain cases, the concerned sports federations are unable to provide the requisite supplements either of the desired quality or quantity. The athletes then

5.

CHALLENGES

1. Lack of Awareness amongst Athletes

2. Inability of Sports Federations

sometimes on their own or in view of the said limitation of the sports federation, consume such supplements from the open market. In view of the fact that such supplements are not obtained from controlled conditions, the chances of ingestion of traces of prohibited substances increases.

The term 'binding precedent' under the doctrine of 'Stare Decisis' means 'to stand by what is decided'. There are various examples of cases where CAS has taken a different view in similar circumstances of doping offences. The reason being that in CAS jurisprudence there is no principle of binding precedent, or stare decisis However the panel also observed that “a CAS Panel obviously tries, if the evidence permits, to come to the same conclusion on matters of law as a previous CAS Panel”. It is understandable that the law related to anti-doping can still considered to be in the nascent stage and therefore to fulfill the ends of justice the principle of stare decisis is not being followed. However, at a certain level standardization is required to elevate the faith in the system of justice created for sports.

A Sport is characterized by the spirit of competitiveness in a healthy manner. However, Sports, like other aspects of the society is increasingly becoming more competitive and the honest spirit of competitiveness is

3. No Principle of Binding Precedents

6.

CONCLUSION


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gradually replaced by dishonest intentions for acquiring win at any cost. This has increasingly made doping in sports, a major issue present across geographical boundaries and requiring urgent attention. Creation of WADA and national authorities like NADA at the national level therefore acquires a greater significance to save the spirit of true competitiveness in sports. However, a greater level of coordination both at the international level and national level would be required to bring more uniformity amongst the existing policies and judicial framework.

References:

1. CAS 2005/C/841 CONI

2. http://www.wada-ama.org/Documents/World_Anti-D o p i n g _ P r o g r a m / W A D P - P r o h i b i t e d -list/2012/WADA_Prohibited_List_2012_EN.pdf [Accessed on 30th July, 2012]

3. CAS 2009/A/1918

4. http://independent.academia.edu/MarcusMazzucco/ Papers/337639/ReThinking_the_Legal_Regulation_of_the_Olympic_Regime_Envisioning_a_Broader_Role_for_the_Court_of_Arbitration_for_Sport [Accessed on 30th July, 2012]

5. Comment to Article 2.1.1 of the Code [The Code may be accessed at http://www.wada-ama.org/rtecontent/ document/code_v2009_en.pdf]

6. CAS 2004/A/628 [IAAF v. USA Track & Field and Jerome Young] award of 28 June 2004

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