CCI proposes draft rules on penalty under amended law
NEW DELHI : Indirect taxes, trade discounts and intra-group sales will be excluded while computing the turnover of an entity for the purpose of imposing a penalty for any violation of competition law, the Competition Commission of India has proposed as part of its draft penalty regulations. CCI has sought public comments on a set of regulations called the CCI (Determination of Turnover or Income) Regulations, 2023 to implement the amended provisions of the Competition Act. The government had amended the law earlier this year.
One of the key amendments was to step up the force of deterrence by introducing a penalty that would be applicable on the global turnover or income of an entity accused of stifling competition. As per this, the penalty could go up to 10% of average sales or income for the three preceding years on each of the entities that was party to an anti-competitive agreement or had abused its dominant position. This penalty would be computed on the global turnover or income, to be computed under CCI's regulations.
CCI will accept public feedback on the draft regulations till 12 January. "The turnover or income shall exclude indirect taxes, trade discounts, and intra-group sales, if any," CCI said in the draft regulations. 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, CCI said.
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