Introduction: The Competition Commission of India (CCI) has issued a call for comments on the draft of the “Competition Commission of India (Determination of Turnover or Income) Regulations, 2023.” This move comes in response to amendments made by the Competition (Amendment) Act, 2023, which necessitates the framing of regulations regarding the determination of turnover or income under specific sections.
Detailed Analysis:
Background and Regulatory Amendments: The article outlines the background, highlighting the amendments introduced by the Competition (Amendment) Act, 2023, which include modifications to Section 27, 48, and Section 64. The CCI is now mandated to formulate regulations for determining turnover or income under the mentioned sections. This has led to the proposal of the draft regulations, titled “CCI (Determination of Turnover or Income) Regulations, 2023.”
Key Provisions of Draft Regulations: The draft regulations are aimed at providing a framework for the determination of turnover or income concerning Section 27(b) and Section 48 of the Competition Act, 2002. The document invites stakeholders to submit written comments on the draft regulations within the specified period, from 22.12.2023 to 12.01.2024. To streamline this process, stakeholders are directed to use the online form available on the CCI website.
Regulatory Framework: The article delves into the background note, explaining the purpose of the Competition Act, 2002, and the recent amendments empowering the CCI to impose penalties based on turnover or income. The proposed regulations aim to define the process of determining turnover or income, essential for penalty imposition.
Draft Regulations Overview: The provided draft regulations outline definitions, including those of the Act, Commission, Chartered Accountant, Enterprise, and Turnover. Section 3 focuses on the determination of turnover or income for enterprises, detailing the inclusion and exclusion criteria. Section 4 addresses the determination of income for individuals under Sections 27 and 48, covering scenarios involving Income Tax Returns (ITRs) and certification by Chartered Accountants.
Removal of Difficulties: The article concludes by emphasizing that in situations not covered by the regulations or requiring interpretation, the decision of the Commission will be binding, ensuring clarity and regulatory oversight.
Conclusion: The Competition Commission of India’s call for comments on the draft regulations reflects a commitment to transparency and stakeholder engagement. Interested parties are encouraged to participate in the comment period and contribute valuable insights to shape the final regulations. This collaborative approach aligns with the CCI’s mission to foster fair competition and protect market interests.
Stay informed, share your thoughts, and be a part of shaping the regulatory landscape for determining turnover or income in India. Visit the CCI website for more details on the comment submission process.
Please find below the Relevant Press Release, Background note and Draft Regulations
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Competition Commission of India
CCI seeks comments on draft of Competition Commission of India (Determination of Turnover or Income) Regulations, 2023
The Competition Commission of India (CCI) seeks comments on the draft of Competition Commission of India (Determination of Turnover or Income) Regulations, 2023.
The Competition (Amendment) Act, 2023, inter alia, amended Section 27, 48 and Section 64 of the Act, consequent to which the CCI is required to frame regulations regarding the manner of determining turnover or income under the Explanation to clause (b) of section 27 and the manner of determining income under clause (c) of Explanation to section 48.
The CCI proposes the draft CCI (Determination of Turnover or Income) Regulations, 2023 which provide for the determination of turnover or income for the purposes of Section 27(b) and Section 48 of the Act.
The CCI invites stakeholders to submit written comments on the draft CCI (Determination of Turnover or Income) Regulations, 2023 from 22.12.2023 to 12.01.2024. The comments must be sent only by duly filling the form available on the website of the CCI:
https://www.cci.gov.in/stakeholders-topics-consultations
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NB/VM/KMN
(Release ID: 1989667) Visitor Counter : 704
Read this release in: Urdu , Hindi
BACKGROUND NOTE:
DRAFT COMPETITION COMMISSION OF INDIA (DETERMINATION OF
TURNOVER OR INCOME) REGULATIONS, 2023
The Competition Act, 2002 (Act) aims to prevent practices having adverse effect on competition, to promote and sustain competition in markets, to protect the interests of consumers and to ensure freedom of trade carried on by other participants in markets, in India. Section 64(1) of the Act empowers the Competition Commission of India (CCI) to make regulations consistent with the Act and the rules made thereunder for carrying out the purposes of the Act.
The Competition (Amendment) Act, 2023, inter alia, amended Section 27, 48 and Section 64 of the Act empowers the CCI to frame regulations for the purposes of imposition of penalty on enterprise and/or person based on turnover or income of such enterprise and/or person. Further, it has been provided that turnover or income will be determined in the manner as specified by regulations.
The CCI proposes the draft CCI (Determination of Turnover or Income) Regulations, 2023 which provide for the determination of turnover or income for the purposes of Section 27(b) and Section 48 of the Act.
The CCI invites stakeholders to submit written comments on the draft CCI (Determination of Turnover or Income) Regulations, 2023 from 22.12.2023 to 12.01.2024. The comments must be sent only by duly filling the form available on the website of the CCI (https://www.cci.gov.in/stakeholders-topics-consultations) .
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[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART
III……………………………………………………… Dated ____…………]
The Competition Commission of India (Determination of Turnover or Income)
Regulations, 2023
(No. __ of 2023)
New Delhi, the __day of __, 2023
In exercise of the powers conferred by sub-section (1) and clause (fb) and (gd) of sub-section (2) of section 64 read with Explanation to clause (b) of section 27 and clause (c) of Explanation to section 48 of the Competition Act, 2002 (12 of 2003), the Competition Commission of India hereby makes the following regulations, namely:-
1. Short Title and Commencement
(1) These regulations may be called the Competition Commission of India (Determination of Turnover or Income) Regulations, 2023.
(2) These regulations shall come into force on the date of their publication in the Official Gazette.
2. Definitions
(1) In these regulations, unless the context otherwise requires-
(a) “Act” means the Competition Act, 2002 (12 of 2003);
(b) “Commission” means the Competition Commission of India established under sub-section (1) of section 7 of the Act;
(c) “Chartered Accountant” means a chartered accountant as defined in Explanation (a) to section 35 of the Act;
(d) “Enterprise” means enterprise as defined under Section 2(h) of the Act and for the purposes of these regulations also includes a person as defined under section 2(l) of the Act;
(e) “Turnover” means turnover as defined under section 2(y) of the Act and as explained in Explanation 2 under section 27(b) of the Act.
(2) Words and expressions used but not defined in these regulations shall have the same meanings respectively as assigned to them in the Act or the rules or regulations framed thereunder or in the Companies Act, 2013 (18 of 2013).
3. Determination of turnover or income for enterprise for the purposes of Section 27 of the Act
(1) Turnover or income, as the case may be, includes the total value of sales or revenue or receipts, by whatever name called, and other operating income, as per the audited financial statements maintained by such enterprise.
(2) The turnover or income shall exclude indirect taxes, trade discounts, and intra-group sales, if any.
(3) In case an enterprise is required to prepare a consolidated financial statement under Section 129 of the Companies Act, 2013 or under any law, turnover or income shall be derived based on such audited consolidated financial statements.
(4) In case audited financial statements are not available, turnover, as determined above, shall be the amount certified by the statutory auditor of the enterprise and supported by an affidavit by any of the persons authorised to sign financial statements of the enterprise. In case of an enterprise where statutory auditor is not appointed, turnover, as determined above, shall be the amount certified by a Chartered Accountant and supported by an affidavit by any of the persons authorised to sign financial statements of the enterprise.
(5) Turnover or income in foreign currency shall be converted into Indian rupee (INR), which shall be the average of the foreign currency reference rates as published by the Reserve Bank of India, for each of the relevant financial year.
4. Determination of income for individual for the purposes of Sections 27 and 48 of the Act
(1) Income in case of an individual shall be the gross total income as per the Income Tax Returns (ITRs) as prescribed under the Income Tax Act, 1961 and the rules made thereunder.
(2) In case ITRs are not available or tax returns are filed in multiple jurisdictions or not filed in any jurisdiction, income shall be the total income as certified by a Chartered Accountant and supported by an affidavit by such individual.
(3) In case an individual who is not required to file ITR, income shall be the total income as certified by a Chartered Accountant and supported by an affidavit by such individual.
5. Removal of Difficulties
In a situation not provided for in these regulations, or in the matter of their interpretation, the decision of the Commission thereon shall be binding.
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