Alerts & Updates 21st Mar 2022

The Central Government has extended the validity of certain exemptions available to enterprises keeping with its policy of ease of doing business in India

Authors

Ravisekhar Nair Partner | Bengaluru
Abhay Joshi Partner | New Delhi | Noida
Parthsarathi Jha Partner | New Delhi | Noida

Latest Thought Leadership

Alerts & Updates 17th Jul 2024

Pharmaceutical Regulations: A move towards greater transparency and accountability

Read More
News & Media 17th Jul 2024

Experts bat for proper litigation policy as taxman’s delays get flak from courts

Read More
Alerts & Updates 17th Jul 2024

Rate Notifications and Circulars issued by the Central Board of Indirect Taxes and Customs (‘CBIC’)

Read More
News & Media 17th Jul 2024

Sector Watch: AMCs seek parity between ULIPs, equity mutual funds from Budget 2024

Read More

The Ministry of Corporate Affairs (MCA), vide gazette notifications dated 16 March 2022, has extended by 5 more years:

    • The validity of the target based exemption (De Minimis Exemption) that was due to expire on 28 March 2022 – The MCA vide a gazette notification dated 27 March 2017 had exempted from notification to the Competition Commission of India (CCI), those combinations where the value of the assets being acquired, taken control off or merged, did not exceed INR 350 crores (Rupees three hundred fifty crores) in assets or INR 1,000 crores (Rupees one thousand crores) in turnover. The 2017 exemption was valid for a period of five years. Now through its notification dated 16 March 2022, the MCA has substituted the period of “five years” in the De Minimis Exemption, with “ten years”, thereby extending the exemption benefit for a further period of 5 years,  e., till 28 March 2027.
  • ELP Note

    This extension of the De Minimis Exemption will be a welcome step for enterprises that are contemplating M&A activities. As a measure of business continuity, the extension aims to reduce the regulatory burden by exempting combinations involving small targets which are unlikely to raise concerns under the Competition Act, 2002.

    • The exemption that allowed enterprises to notify combinations to the CCI beyond the statutorily mandated period of 30 days  (of entering into a binding agreement / document or approval from board of directors)  has also been extended – The MCA vide its notification dated 16 March 2022 has substituted the words “five years” in the notification dated 29 June 2017, with “ten years”, thereby extending the exemption for a further period of 5 years from previously 28 June 2022 to 28 June 2027.
  • ELP Note

    This  extension, also in the nature of a continuity measure, recognizes the commercial realities that parties who require a mandatory approval from CCI for their transactions will, in any event, act in a prudent, compliant and time bound manner.