Category Archives: regulatory updates


The Ministry of Finance vide its press release dated 6 January 2018 has informed that representations are received from the companies against whom an application for corporate insolvency resolution has been admitted by the adjudicating authority under section 7, 9 and 10 and are facing hardship due to restriction in allowance of brought forward loss for computation of book profit under section 115JB of the Income Tax Act 1961 .

In view of the above, proposed relaxations in the provisions relating to levy Minimum Alternate Tax (MAT) in case of the companies against whom an application for corporate Insolvency Resolution Process has been admitted under the insolvency and Bankruptcy Code 2016.

With effect from the assessment year 2018-19 and financial Year 2017-18, it is proposed that in case of a company, against whom an application for corporate insolvency resolution process has been admitted by the adjudicating authority, the amount of total loss brought forward (including unabsorbed depreciation) shall be allowed to be reduced from the book profit for the purposes of levy of MAT under section 115JB of the Act.




The Union Cabinet has accorded its consent for the protocol amending the Agreement between India and China for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to taxes on income. The key aim is to update the provisions on exchange of information of the DTAA to the latest international standards. Further the Protocol will incorporate changes required in relation to implement treaty related minimum standards under the action reports of Base Erosion & Profit shifting (BEPS), in which India had participated on an equal footing. Besides minimum standards, the protocol will also bring in changes as per BEPS action reports as agreed upon by both the countries.



The Income Tax Act, 1961 (the IT Act) mandates the taxation of premium received on issue of shares to resident Indians in excess of Fair Market Value (‘FMV’) by a company, as income u/s 56(vii) (b) of the Income Tax Act, 1961 in the hands of such company. Tax on the excess money received over and above the FMV was exempted in case if issuer is a start-up company. However, the tax authority continued raise tax demand quoting reason as the abnormal valuation projections etc. The Central Board of Direct Tax has instructed the tax authority that if additions have been made after modifying/rejecting the valuation reports submitted by start-up companies, no coercive measures to recover the tax demand be taken. Further, for all such cases which are pending before the Appellate Authority, necessary administrative steps should be taken for expeditious disposal of appeals, preferably by March 31, 2018.




The Ministry of Health and Family Welfare of Government of India has released draft Clinical Trial (CT) Rules 2018, which will come in force after its final publication in the Official Gazette. The new rules have been drafted after consultation with the Drugs Technical Advisory Board (DTAB).


Drug & Clinical Trial Rule 2018 will be applicable to all new drugs, investigational new drugs for human use, clinical trial, bioequivalence study, bioavailability study and ethics Committee.

The Key Highlights of the Draft Clinical Trial Rules:

  1. All clinical trial institution, organization, entities or any other such group, which intends to conduct a CT or bioavailability study or bioequivalence study, is required to have an Ethics Committee (EC) supervising the CT at all times. The role of the EC has been expanded and has been made vital to any CT or bioavailability study or bioequivalence study.
  2. An EC needs to obtain a registration from the Central Licensing Authority (CLA) and it must have a minimum of seven members from Medical Science, Scientific, Non-medical, Non- scientific, and layperson and a woman member constituted by an institution conducting CT.
  3. Form CT-02 is the relevant form under which an EC is granted a registration under the draft rules, registration will be valid for a period of three years from the date of its issue unless suspended or cancelled by the Central Licensing Authority.
  4. Any person or institution intending to conduct a clinical trial of a new drug or investigational new drug shall procure a prior approval from the CLA, the permission to conduct a clinical trial is granted under rule 22 of the draft rules and as per the specifications of Form CT-06. Once the CLA approves and provides a license to conduct a CT, the same shall remain valid for a period of two years from the date of its issue, unless suspended or cancelled by the CLA.
  5. Whereas, the scope of the CT is only to do academic trials i.e. constraining the CT only to academic findings without human intervention then no permission is required from CLA to conduct a CT for any drug in the following circumstances:
  • The CT drug formulation is intended solely for academic research purposes,
  • The CT has been approved by the EC,
  • The observations of such CT are not required to be submitted to the CLA; and
  • The observations of such CT are not used for promotional purposes.
  1. Cases where an EC is not available on the site of CT, then a CT can only be initiated after getting the protocol approved from the Institutional Ethics Committee of another trial site or an independent EC constituted under the Rule 7. Provided that the approving Ethics Committee shall in such case be responsible for the study at the trial site or the centre, as the case may be.
  2. Provided further that, the approving Ethics Committee and the clinical trial site or the bioavailability and bioequivalence centre, as the case may be, shall be located within the same city or within a radius of 50 km of the clinical trial site.
  3. In case of termination of any CT, the detailed reasons for such termination should be communicated to the CLA within thirty days of such termination.
  4. Any report of a serious adverse event occurring during the CT to a subject of the CT, after due analysis, should be forwarded to the CLA, the chairperson of the EC and the Institute where the CT has been conducted within fourteen days of its occurrence.
  5. In case of an injury during a CT to the subject of such trial, complete medical management and compensation should be provided by the firm and details of compensation provided in such cases shall be intimated to the CLA within thirty days of the receipt of recommendations made by EC.
  6. In case of a CT related death or permanent disability of any subject during the trial, compensation shall be provided within thirty days of receipt of the order issued by the CLA. Whereas, the details of compensation provided in such cases should be intimated to the CLA.
  7. A license has to be obtained by the institutions or organizations for manufacturing or importing new drugs or investigational new drugs or for the manufacture of unapproved active pharmaceutical ingredient for the development of any formulation, for a CT, bioavailability, bioequivalence study etc.
  8. The institutions or organizations have to also obtain a license to manufacture or import new drugs for sale or for distribution under the Rules.
  9. No CT can be conducted without procuring a free consent from its participants or study subject. The consent shall be freely given, it should be an informed consent and shall be in written form. It is the duty of the investigator to provide detailed information to the participants both orally as well as by using an information sheet, that too in a language that is understandable by the respective participants.
  10. A written consent from the participants of the CT is mandatory as per the draft rules, the same needs to be taken through an “Informed Consent Form”, the patient information sheet and the informed consent form must be approved by the ethics committee and shall be submitted to the CLA. In case any changes are to be made to the informed consent documents, the same has to be approved by the EC and subsequently shall be submitted to CLA.
  11. In case a participant fails to or is not able to provide his/her consent then a legal representative of the participant can provide the consent or the same may be obtained in presence of witnesses.
  12. Where a CT on paediatrics is been conducted and the participants are unable to provide written informed consent, the consent shall be obtained from the parent or legal guardian. Additionally, paediatric participants should additionally agree to enrol in the CT.
  13. It is mandatory to have an audio-video recording of the informed consent process where vulnerable subjects, CT of New Chemical Entity or New Molecular Entity including procedure of providing information to the subject and his understanding on such consent, shall be maintained by the investigator for record. In cases of anti- HIV and anti-leprosy drugs, only an audio recording of the informed consent process needs to be maintained.
  14. The quality assurance system shall be implemented to ensure that data generated, documented and reported in compliance with the protocol and GCP guidelines, proper implementation of the rules and regulations under the draft CT rules is the responsibility of the Sponsor of the respective CT.
  15. Status report needs to submitted by the Sponsor to ensure that the CT is been conducted as per the prescribed rules and regulations.
  16. Where any serious adverse event occurs at the CT site, the sponsor shall submit a Serious Adverse Event (SAE) report to CLA, it the duty of the Sponsor to submit the SAE after due analysis of the event and shall make the necessary payment for medical management of the participants and the sponsor shall also provide financial compensation for the CT related injury or death (If any).
  17. Post-trial access of the investigational drug shall be provided by the sponsor by providing a drug free of cost to the participants as per the directions of the CLA, and in special circumstances on the recommendations of the investigator and the EC upon taking a written consent of the patient.







SEBI vide its circular dated 15 February 2018 has directed that RIIs applying for shares in IPO should be compensated if Self Certified Syndicate Banks (SCSB) fail to make the allotment despite of RIIs eligibility.

In order to bring uniformity in the calculation of compensation available to the RIIs, SEBI has stated that the compensation shall be calculated as below:

(Listing price– issue price) *multiplied by* (no. of shares that would have been allotted if a bid was successful) *multiplied by* (probability of allotment of shares determined on the basis of allotment).



SEBI vide its circular dated 22 February 2018 has provided the following methods for complying with the Minimum Public Shareholding (MPS) requirement:

  1. Open market sale of shares held by the promoters/promoters group up to 2% of the paid-up equity share capital of the listed entity in the open market subject to five times average monthly trading volume of the shares of the listed entity.
  2. Qualified Institutions Placement (QIP).

QIP offers a quick solution to listed entities enabling them to meet MPS requirements apart from meeting their funding requirements. Also, a sale of a certain small percentage of shares through the open market will facilitate quicker and cheaper compliance for listed entities where promoters hold shares marginally above the threshold limit.
Rule 19A of the Securities Contracts (Regulations) Rules, 1957 stipulates that every listed company shall maintain a public shareholding of at least 25%. Listed public sector companies have been provided additional time till 21 August 2018 to comply with the requirements.

Accordingly, listed entities that have a public shareholding of less than 25% are required to adopt any of the certain methods to comply with the MPS requirements, such as issuance of shares to public through prospectus, offer for sale to public through prospectus, Sale of shares held by promoters through secondary market, Institutional Placement Program, rights issue to public shareholders, bonus shares to public shareholders, open market sale and QIP.




MCA vide its notification dated 9 February 2018 has notified the “Companies (Registered Valuer’s and Valuation) Amendment Rules, 2018“, to amend Rule 11 on “Transitional Arrangement”, i.e. persons rendering valuation services.

According to the provisions of these rules, any person rendering valuation services under the said act on the date of the commencement of the particular rules can continue to until 31 March 2018 without a certificate, however, with the new amendment the time has been extended till 30 September 2018.