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Beijing Court Cracks Down on Malicious Trademark Registrations, Protecting IP Rights

Monika Shanmugam
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Beijing Court Cracks Down on Malicious Trademark Registrations, Protecting IP Rights

In a bold move to combat intellectual property infringement, a Beijing court has unveiled 10 landmark cases, showcasing its commitment to cracking down on malicious trademark registrations. The initiative aims to send a powerful message affirming the court’s dedication to safeguarding legitimate intellectual property (IP) rights and fostering a fair market environment.

Court’s Determination:

Song Yushui, vice-president of the Beijing Intellectual Property Court, underlined the court’s resolve to address the issue of malicious trademark registrations. She emphasised the court’s efforts to enhance the quality of case handling, describing these registrations as disruptive to market order. Tactics such as trademark squatting, appropriation, and imitation have been identified as contributors to this issue.

Notable Trends:

Song highlighted a concerning trend where individuals register trademarks based on current events, breaking news, prominent figures, or issues with high social attention. Such registrations not only infringe on the rights of legitimate IP owners but also disrupt fair market competition.

Clear Guidelines:

To counteract these practices, the court has released 10 concluded cases, outlining specific circumstances and actions that qualify as ‘malicious’ trademark registrations. This move aims to provide clear guidelines for businesses and individuals seeking to register trademarks, promoting transparency in the process.

Industry Applauds Efforts:

Industry experts have welcomed the court’s proactive stance. Wu Dongping, secretary-general of the China Trademark Association, commended the court’s commitment, emphasising that combating malicious registrations ensures fair competition and protects innovators. This, in turn, contributes to high-quality economic development.

Protecting Intangible Assets:

Liu Wenchao, a political adviser in Beijing, stressed the significance of safeguarding trademarks as essential intangible assets for enterprises. He urged the court to maintain pressure on malicious registrations, aligning with China’s aspiration to become a global ‘brand power.’

The Beijing court’s crackdown on malicious trademark registrations marks a significant step towards reinforcing intellectual property rights and establishing a level playing field in the market. The release of these landmark cases not only serves as a deterrent to potential infringers but also provides valuable guidance for businesses navigating the trademark registration landscape in China.

Lessor is Liable to Pay GST on Forward Charge Basis When the Residential Property is Rented Out for Commercial Purpose

Monika Shanmugam
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Lessor is Liable to Pay GST on Forward Charge Basis When the Residential Property is Rented Out for Commercial Purpose

In a recent ruling by the AAR, Rajasthan, the GST liability for lessors of residential properties used for commercial purposes has been clarified. The case of M/s. Deepak Jain highlights the obligation of the lessor to pay GST on a forward charge basis in such scenarios.

Table of Contents

Facts:

M/s. Deepak Jain, a practising Chartered Accountant, owns a residential property in Jaipur. Leasing it to Back Office IT Solution Pvt. Ltd. for commercial use, the lessor faced the crucial question of whether GST is applicable on a forward charge basis.

Issue:

The primary issue addressed was whether the lessor is liable to pay GST on a forward charge basis when a residential property is rented out for commercial purposes.

Ruling:

The AAR, Rajasthan, in Advance Ruling No. RAJ/AAR/2023-24/14, concluded that:

  • The premises, though designated residential by the Authority, is considered non-residential due to its commercial use.
  • Renting for commercial use falls under SAC 997212, attracting an 18% tax rate.
  • The lessor is obligated to pay GST at the specified rate on a forward charge basis.
  • The lessor is exempt from Reverse Charge Mechanism, as per the terms of the Notification.
  • The determination of whether the premises is residential hinges on its purpose of use and the intended users’ length of stay.

This ruling emphasises the need for lessors to be aware of their GST liabilities when leasing residential properties for commercial purposes. The AAR’s decision provides clarity on the taxation of such transactions, ensuring compliance with the law and avoiding potential disputes.

Empowering Tech Women: Cognizant’s ‘Shakti’ & Nasscom Forge Diversity Path in India’

Akash G Varadaraj
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Empowering Tech Women: Cognizant’s ‘Shakti’ & Nasscom Forge Diversity Path in India’

Cognizant, a global leader in professional services, unveiled ‘Shakti,’ a groundbreaking program aimed at empowering women in technology and propelling their career growth. This initiative, launched in collaboration with Nasscom, India’s prominent IT industry association, signifies a strategic move towards fostering diversity and inclusion (D&I) across the tech sector in the country.

Exceeding industry norms, Cognizant boasts a nearly 40% female workforce in India, outstripping the average of 36%. Notably, half of its 13 Indian centres have surpassed the 40% mark, underscoring the company’s dedication to achieving gender parity.

Shakti operates through a multifaceted approach, catering to women’s talent development at various career stages:

  • RISE offers leadership development training for mid-level female associates in India
  • Propel, a global leadership program, accelerates the careers of senior women through coaching and mentoring
  • Returnship, a 12-week paid upskilling initiative, aids women in re-entering the workforce after career breaks
  • The ‘Be Gritty’ program furnishes fresh campus hires with training to foster a growth mindset.

Cognizant fosters a culture of inclusion by engaging male allies through an allyship program, aiming to address challenges faced by women in the workplace. Furthermore, the company equips associates with inclusive leadership skills and operates the Women Empowered Affinity Group, comprising 50,000 members and allies in India, focused on enhancing work experiences for women and driving business impact. The Inspirational Stories Campaign highlights successful women at Cognizant to inspire others and demonstrate the program’s efficacy.

In a collaborative effort with Nasscom, Cognizant endeavours to set and prioritise D&I best practices within India’s tech sector. Both organisations plan to share insights, policies, and progress measurement strategies, thereby ensuring the success of this joint initiative.

Recognising the pivotal role of leadership, Cognizant actively involves its leaders in embedding D&I behaviours within the organisation. By implementing and evaluating Shakti’s initiatives, the company ensures long-term success and a lasting impact on the industry.

Shakti signifies a significant stride toward Cognizant’s vision of an inclusive workplace, enabling women to flourish and realise their full potential. Through its collaboration with Nasscom, Cognizant aims to act as a catalyst for positive change in India’s tech landscape, envisioning a more equitable and empowered future for all.

According to Vakilsearch experts, Cognizant’s ‘Shakti’ and nasscom’s collaboration to promote gender diversity in the tech sector not only amplifies opportunities for women but also sets a precedent for industry-wide inclusion. This alliance brings forth legal considerations regarding workforce policies, potentially influencing legislative reforms to foster a more equitable work environment.

SEBI Nears Clarity: Kamath Confirms Clear Compliance Guidelines for Indian Firms

Akash G Varadaraj
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SEBI Nears Clarity: Kamath Confirms Clear Compliance Guidelines for Indian Firms

Indian corporate entities may soon find themselves on smoother regulatory terrain, as KV Kamath, chairman of the industry-driven SEBI compliance forum, assures the imminent arrival of comprehensive guidelines to align with the market watchdog’s norms.

The Securities and Exchange Board of India (SEBI)-conceived forum, dedicated to aiding the implementation of diverse regulations, has made substantial headway in formulating these guidelines. Kamath emphasised their focus on recent mandates such as rumour verification by listed entities, revamped Listing Obligations and Disclosure Requirements (LODR), and the advent of Environmental, Social, and Governance (ESG) assurances.

This initiative stands poised to alleviate compliance burdens for corporations, furnishing them with pragmatic, clearly delineated steps to meet SEBI’s expectations. The forum, comprising eminent industry bodies like Assocham, CII, and FICCI, endeavours to bridge the gap between regulatory mandates and their real-world execution.

Kamath asserted, ‘The Industry Standards Forum is diligently crafting clear and pragmatic guidelines for companies to comply with SEBI regulations. We envisage a considerable enhancement in transparency and compliance ease for Indian businesses, thereby benefiting both investors and the market.’

While the precise timeline for releasing these guidelines remains undisclosed, Kamath’s affirmation casts a favourable light for companies navigating the constantly evolving regulatory landscape. This assurance offers hope to businesses striving to manoeuvre within regulatory changes effectively.

Vakilsearch experts commend SEBI’s initiative to streamline compliance guidelines. They stress the need for businesses to stay updated and leverage professional legal counsel for seamless adherence.

Company Faces ₹5 Lakh Penalty for Breaching Registered Office Compliance: Ministry of Corporate Affairs Takes Action

Team Vakilsearch
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Company Faces ₹5 Lakh Penalty for Breaching Registered Office Compliance: Ministry of Corporate Affairs Takes Action

The Ministry of Corporate Affairs has levied a hefty fine on DP Investment Services Pvt. Ltd. and its directors for neglecting their registered office obligations. The issuance of a Show Cause Notice under Section 206(1) of the Companies Act, 2013 marked the initiation of action against the company and its directors, which unfortunately didn’t receive any response.

The situation escalated when attempts to communicate with the company failed, with the Show Cause Notice being returned undelivered. A physical inspection of the registered office premises unveiled a locked office space without any signage indicating the company’s details. This raised concerns regarding the company’s adherence to maintaining its registered office at the recorded address as per MCA21 records.

Section 12 of the Companies Act, 2013 mandates strict obligations regarding the registered office, emphasising the need for visibility, verification, display of information, and compliance in various scenarios, including name changes or transitions for One Person Companies.

Despite the repeated notices and the absence of a response, the Adjudicating Officer scrutinised the case thoroughly and concluded that the company hadn’t maintained its registered office between 16 May 2023, and 30 November 2023. Consequently, a significant penalty of ₹5 Lakhs was imposed on the company and its directors.

The Ministry directed the company and its directors to rectify this non-compliance immediately upon receipt of the order copy. Additionally, the Ministry specified that the imposed penalty must be paid exclusively through the Ministry of Corporate Affairs portal.

This development underscores the criticality of complying with statutory requirements. The Ministry’s swift action serves as a reminder to businesses about the repercussions of non-compliance, urging them to prioritise adherence to regulatory norms.

Vakilsearch’s legal experts emphasise the vital significance of adhering to the Companies Act, 2013 emphasising how maintaining a registered office is pivotal for compliance. Non-compliance could lead to severe penalties and legal consequences, emphasising the necessity for proactive adherence to statutory requirements.

AI’s Growing Role in Uncovering GST Evasions Raises Concerns Among Businesses

Team Vakilsearch
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AI’s Growing Role in Uncovering GST Evasions Raises Concerns Among Businesses

In a striking revelation, AI technology played a pivotal role in identifying GST mismatches amounting to a staggering ₹30,000 crore during the previous financial year. Senior officials at the finance ministry disclosed that they have successfully recovered ₹15,000 crore of the identified amount, underscoring the significant impact of artificial intelligence in tax administration.

A substantial surge in scrutiny has been witnessed, with central tax officers dispatching approximately 33,000 GST notices to businesses concerning discrepancies in returns for the 2017-18 and 2018-19 periods. This sharp increase in notices has sparked apprehensions among businesses, with concerns amplified by a senior government official confirming AI’s primary responsibility for detecting tax evasions and consequently issuing a higher number of notices.

Specific industries have come under intense scrutiny, including online gaming companies, which faced 71 show-cause notices for alleged GST evasions amounting to a staggering ₹1.12 lakh crore between 2022-23 and the initial seven months of 2023-24. Notably, 15 major insurance companies, including prominent names like Bajaj Allianz, Aditya Birla Sun Life Insurance, and HDFC Life Insurance, are accused of evading ₹2,350 crore in GST payments. Further, sectors such as aviation and shipping have also piqued the interest of tax authorities.

While acknowledging AI’s effectiveness in detecting trends, experts caution against sole reliance on this technology for issuing notices. One expert stressed the importance of human intellect in tax administration, stating, ‘AI is a powerful tool to identify trends, but its blind utilisation by the government to issue notices could lead to legal implications.’

Contrary to assertions, officials from the finance ministry’s revenue department clarified that AI is utilised solely for identifying payment discrepancies, after which human intervention determines whether a demand notice is warranted for a particular case. However, concerns persist regarding the prevalence of notices solely triggered by AI without substantial human assessment.

Another expert emphasised that while AI expedites data review and gap identification, it should not serve as the sole basis for issuing notices. The need for tax authorities to engage in discussions with taxpayers regarding factual and legal aspects before issuing notices was stressed for effective utilisation of AI and emerging technologies.

Addressing the need for improved communication between industries and the government amid increased AI reliance, experts advocated for issuing intimation notices before show-cause notices. These notices, a provision within the GST law, inform taxpayers about discrepancies and seek explanations within 30 days, reducing the element of surprise and friction.

Reflecting on the evolving landscape of tax administration, officials noted the increasing sophistication brought about by AI and standardised legal interpretations. They highlighted the diminishing areas where businesses could conceal discrepancies owing to the evolving case law and standardised data analytics.

The growing reliance on AI in uncovering tax evasions signals a paradigm shift in tax administration, necessitating a balanced approach that harnesses technology while ensuring human oversight to maintain legality and fairness in the process.

Labour Code Overhaul: Balancing Rights and Protections for Indian Workers

Team Vakilsearch
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Labour Code Overhaul: Balancing Rights and Protections for Indian Workers

The Union government’s overhaul of 29 labour laws into four labour codes aimed at regulating industrial relations and workers’ welfare faces resistance from labour unions nationwide. Particularly in Tamil Nadu and Kerala, concerns arise over potential loss of hard-won state-level protections for workers.

Tamil Nadu’s Manual Workers Act 1982 shields unorganised workers through 18 welfare boards, offering vital benefits like pensions, educational aid, and maternity support. However, the new codes lack clauses ensuring progressive regulation for manual workers and safeguarding these welfare boards.

Approximately 93% of India’s workforce operates informally, predominantly comprising marginalised communities. The codes seemingly prioritise social security for organised workers, leaving informal workers reliant on vaguely defined ‘welfare schemes’ without employer or government-backed funding.

Alarming trends of job casualisation in formal sectors exacerbate concerns. Contractual labour, now prevalent even in critical sectors like sanitation and manufacturing, faces inadequate protections and a lack of routes to regular employment.

Moreover, the new codes disregard key principles outlined by the International Labour Organisation (ILO), spurring demands from unions for comprehensive legislation safeguarding informal workers’ rights, collective bargaining, fair wages, social security, and occupational safety.

Unions urge the government to reverse repeals of sectoral laws, reinstate funding cesses for welfare schemes, and draft specific legislation catering to the diverse needs of informal workers in various sectors.

Addressing the plight of informal workers is critical for India’s overall employment landscape and socio-economic development. The need for nuanced, sector-specific legislation to protect and empower informal workers remains paramount amidst these labour reforms.

Vakilsearch experts emphasise the need for nuanced legal solutions to safeguard rights of informal workers impacted by labour code reforms. They advocate for sector-specific legislation ensuring protection and fair treatment, aligning with international standards and principles laid down by the ILO. Their focus lies in advocating for fair wages, social security, and dispute resolution mechanisms for marginalised workers in India’s diverse sectors.

Navigating Tax Regimes: Choosing Between New and Old for FY24

Nithya Ramani Iyer
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Navigating Tax Regimes: Choosing Between New and Old for FY24

As the new financial year approaches, taxpayers are faced with the dilemma of choosing between the old and new tax regimes introduced by the Indian government in 2020. The decision hinges on various factors, and a clear understanding of the distinctions is crucial.

The central difference lies in deductions and exemptions. The old regime permits claims under sections like 80C, 80D, and 24(b), significantly reducing taxable income. Conversely, the new regime trims deductions but offers lower tax rates. Individuals need to carefully assess their financial circumstances to optimize tax planning.

Consider the case of Mr. Sharma, a salaried individual. Traditionally, he leveraged deductions for house rent, children’s education, and medical expenses to lower his tax liability. However, the new regime poses a dilemma as it eliminates these deductions while proposing lower tax rates.

For planning in FY24, taxpayers should weigh the pros and cons of each regime based on their financial situation. Aakanksha Goel, Direct Tax Partner at T R Chadha & Co LLP, suggests that individuals should annually evaluate the benefits of the old versus new regime. Generally, the new regime is advantageous when total deductions are under 1.5 lakhs, while the old regime prevails if deductions exceed 3.5 lakhs, factoring in income levels and slab rates.

Corporates, too, face considerations. The new regime, once adopted, is irreversible, and careful evaluation is crucial. Assessing the impact of foregone deductions over the long term is necessary for accurate projections. Swati Chavarkar, Head of Payroll Outsourcing at Core Integra, notes that the new tax regime is the default for taxpayers from FY 2023-24. For those with taxable income under 15 lakhs, the new regime is generally beneficial.

Bhuvanaa Shreeram, Co-founder and Head of Financial Planning at House of Alpha emphasises aligning choices with financial goals. The decision-making process should not compromise essential financial habits, like maintaining insurance policies that might not offer tax benefits in the new regime.

In conclusion, taxpayers must conduct a thorough analysis of income sources, expenses, and potential deductions. Seeking advice from tax advisors or using online calculators can aid in comparing tax liabilities under both regimes. With the new financial year beckoning, an informed decision ensures that individuals and corporations optimize their tax planning strategies effectively.

Supreme Court Upholds Center’s Decision to Revoke Article 370 in Jammu and Kashmir

Nithya Ramani Iyer
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Supreme Court Upholds Center’s Decision to Revoke Article 370 in Jammu and Kashmir

The Supreme Court, led by Chief Justice DY Chandrachud, made a big decision about Jammu and Kashmir. They supported the government’s choice to end the special status given by Article 370. The court said Article 370 was a temporary thing to help Jammu and Kashmir join India. The Chief Justice stressed that Jammu and Kashmir should be treated like other states and asked for elections by September 30, 2024. Even though Jammu and Kashmir lost some control when it joined India, the court explained why the special status stayed. This decision cancels Article 370, taking away Jammu and Kashmir’s unique laws and decision-making powers, and ending its special status.

The court argued that Jammu and Kashmir’s constituent assembly, formed solely to frame the constitution, was not intended to be permanent. Chief Justice Chandrachud stated that the assembly’s recommendations were non-binding on the President. The court explained that while the special conditions for Article 370 ceased with the constituent assembly, the situation in the state persisted, justifying the article’s continuation. This ruling exemplifies asymmetric federalism, citing examples like Articles 371A to 371J providing special arrangements for different states.

The three separate judgments delivered by the bench underscored the complex nature of the case. Chief Justice Chandrachud, along with Justices BR Gavai and Surya Kant, authored one judgment. Another concurring judgment was given by Justice Sanjay Kishan Kaul, and a third by Justice Sanjiv Khanna, concurring with the former two. The removal of Article 370 stripped Jammu and Kashmir of its constitution and exclusive decision-making powers, ending its special status.

Article 370 granted Jammu and Kashmir autonomy in decision-making, except in defence, communications, and foreign affairs. Its annulment resulted in the state losing its unique status. Article 35A, embedded within Article 370, which granted the state the authority to define permanent residents and confer special rights, also ceased to exist.

The Supreme Court clarified that it deemed unnecessary an examination of the validity of Jammu and Kashmir’s reorganisation into a Union Territory, as it was a temporary arrangement until the election and reinstatement of statehood. This judgment marks a significant milestone in the constitutional landscape, affirming the constitutional validity of the Center’s decision to revoke Article 370 and paving the way for Jammu and Kashmir’s equal treatment as a Union Territory.

The ruling has profound implications for the region’s political and constitutional landscape, with the removal of Article 370 reshaping Jammu and Kashmir’s legal status within the Indian Union. The court’s comprehensive explanations regarding the historical context and constitutional nuances provide clarity on the validity and consequences of the decision. As Jammu and Kashmir transition, the court’s directive for elections by 2024 emphasises the importance of swift political normalisation and restoration of democratic processes in the region.

In conclusion, the Supreme Court’s verdict on Article 370 signifies a decisive moment in India’s constitutional history. The removal of special status for Jammu and Kashmir aligns the region with the constitutional framework applicable to other states, affirming the principle of equal treatment. This ruling carries far-reaching implications for the socio-political landscape of Jammu and Kashmir, setting the stage for a new era in the region’s governance and constitutional identity.

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