Home India Ministry of Corporate Affairs Notification under Section 5 of the Competition Act...
Date: 07-Mar-2024 Category: Extra Ordinary State: Union Government Country: India

Notification under Section 5 of the Competition Act

Issued by Ministry of Corporate Affairs · Not Applicable

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Executive Summary & Key Takeaways

What it means

  • The notification provides an exemption to certain enterprises from the provisions of Section 5 of the Competition Act, 2002, for a period of two years from the date of publication in the Official Gazette.
  • This exemption applies to acquisitions, control acquisitions, mergers, and amalgamations where the value of assets being acquired, taken control of, merged or amalgamated is not more than Rupees Four hundred and fifty crore in India or turnover of not more than Rupees One thousand two hundred and fifty crore in India.

Key Changes

  • Enterprises involved in acquisitions, control acquisitions, mergers, or amalgamations are exempt from Section 5 of the Competition Act, 2002, if their asset value in India does not exceed INR 450 crore or their turnover in India does not exceed INR 1250 crore.
  • The exemption is valid for two years from March 7, 2024.
  • For acquisitions/mergers of a portion of an enterprise, the asset value is determined by the book value of assets (including brand value, goodwill, intellectual property etc.) as per audited accounts, and turnover is certified by the statutory auditor.
  • The asset value is determined based on the audited books of accounts or statutory auditor’s report in the financial year immediately preceding the financial year in which the date of the proposed combination falls, as reduced by any depreciation.

Impact Analysis

Stakeholders Impacted

  • Investors: May find smaller M&A deals more attractive due to reduced regulatory hurdles.

Suggested Action Items

  • Review internal compliance policies and procedures to reflect the changes introduced by this notification.

Key Entities Referenced

Competition Act, 2002: The primary legislation governing competition in India, aimed at preventing anti-competitive practices and promoting market competition. Central Government: The issuer of the notification, exercising powers conferred by Section 54 of the Competition Act, 2002. Competition Commission of India (CCI): The regulatory body responsible for enforcing the Competition Act, 2002 and promoting competition in India. Enterprises: Businesses involved in acquisitions, mergers, or amalgamations that are subject to the Competition Act, 2002. Statutory Auditor: The auditor responsible for auditing and certifying the financial statements of the company.
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रजिस्ट्री स.ं डी.एल.- 33004/99 REGD. No. D. L.-33004/99 सी.जी.-डी.एल.-अ.-08032024-252734 CG-DxLx-xEG-I0D8H0x3x2x0 24-252734 xxxGIDExxx असाधारण EXTRAORDINARY भाग II—खण् ड 3—उप-खण्ड (ii) PART II—Section 3—Sub-section (ii) प्राजधकार स ेप्रकाजित PUBLISHED BY AUTHORITY स.ं 1074] नई दिल्ली, बृिस्ट्प जतर्ार, माच य7, 2024/फाल्ग नु 17, 1945 No. 1074] NEW DELHI, THURSDAY, MARCH 7, 2024/PHALGUNA 17, 1945 कारपोरेट कार् यमत्रं ालर् अजधसचू ना नई दिल्ली, 7 माच,य 2024 का.आ. 1131(अ).— केंद्रीर् सरकार, प्रजतस्ट्पधाय अजधजनर्म 2002 (2003 का 12) की धारा 54 के खडं (क) द्वारा प्रित्त िजिर्ों का प्रर्ोग करते हुए, िनजित म ेंउन उद्यमों को छूट प्रिान करती ि ैिो पक्षकार ि ैं- (क) प्रजतस्ट्पधा यअजधजनर्म की धारा 5 के खंड (क) में जनर्ियष्ट कोई भी अजधग्रिण; (ख) एक उद्यम पर एक व्यजि द्वारा जनर्ंत्रण अर्ियत करना िब ऐसे व्यजि के पास पूर्य स े िी उत्पािन, जर्तरण र्ा समान र्ा समरूप र्ा प्रजतस्ट्थापन र्ोग्र् माल का व्यापार र्ा समान र्ा समरूप र्ा प्रजतस्ट्थापन र्ोग्र् ि ै र्ा दकसी अन्र् के उपबंध िैसा दक िो प्रजतस्ट्पधाय अजधजनर्म की धारा 5 के खंड (ख) में जनर्िष्टय ि;ै और (ग) प्रजतस्ट्पधा यअजधजनर्म की धारा 5 के खंड (ग) में जनर्िष्टय कोई जर्लर् र्ा समामेलन। ििां, रािपत्र म ें इस अजधसूचना के प्रकािन की तारीख स े िो र्र् य की अर्जध के जलए उि अजधजनर्म की धारा 5 के उपबंधों के अनरूु प अजधग्रिण की िा रिी, जनर्ंजत्रत की िा रिी, जर्लर् र्ा समामेलन की िा रिी आजस्ट्त का मल्ू र् भारत म ें चार सौ पचास करोड़ रुपर्े स ेअजधक निीं ि ै र्ा भारत म ें टनओय र्र एक ििार िो सौ पचास करोड़ रुपर् े से अजधक का निीं ि।ै 2. ििां दकसी उद्यम र्ा प्रभाग र्ा व्यर्सार् के एक भाग का अजधग्रिण दकर्ा िा रिा िै, जर्लर् का जनर्ंत्रण जलर्ा िा रिा ि ै र्ा दकसी अन्र् उद्यम के साथ समामेजलत दकर्ा िा रिा ि,ै उि भाग र्ा प्रभाग र्ा व्यर्सार् की आजस्ट्त का मल्ू र् और र्ा उसके कारण, सुसंगत आजस्ट्त िोगी और अजधजनर्म की धारा 5 के अधीन सीमाओं की गणना के प्रर्ोिन के जलए टनयओर्र 1633 GI/2024 (1)2 THE GAZETTE OF INDIA : EXTRAORDINARY [PART II—SEC. 3(ii)] को ध्र्ान में रखा िाएगा। उि भाग र्ा प्रभाग र्ा कारबार का मूल्र् उद्यम के लेखापरीजक्षत लेखाबजिर्ों में र्ा र्ैधाजनक लेखापरीक्षक की ररपोटय के अनसु ार दिखाए गए आजस्ट्तर्ों के बिी मूल्र् को लेकर अर्धाररत दकर्ा िाएगा, ििां जर्त्तीर् जर्र्रण फाइल करना अभी िर्े निीं ि,ै उस जर्त्तीर् र्र्य से ठीक पिल े के जर्त्तीर् र्र्य में जिसमें प्रस्ट्ताजर्त संर्ोिन की तारीख आती ि,ै दकसी भी मल्ू र्ह्रास द्वारा कम दकर्ा गर्ा ि,ै और इसमें आजस्ट्त के मल्ू र् म ें ब्ांड मूल्र्, साख का मूल्र्, र्ा कॉपीराइट, पेटेंट का मूल्र्, अनमु त उपर्ोग, सामूजिक जचह्न, रजिस्ट्रीकृत स्ट्र्ामी, रजिस्ट्रीकृत व्यापार जचह्न, रजिस्ट्रीकृत उपर्ोगकता,य समानाथी भौगोजलक संकेत, भौगोजलक संकेत, जडजाइन र्ा लेआउट- जडजाइन र्ा धारा 3 की उप-धारा (5) में जनर्ियष्ट ऐस े अन्र् र्ाजणजयर्क अजधकार, र्दि कोई िों, सजममजलत ि।ैं उि भाग र्ा प्रभाग र्ा कारबार का टनयओर्र र्ैधाजनक लेखापरीक्षक द्वारा कंपनी के अंजतम उपलब्ध लेखापरीजक्षत र्था प्रमाजणत खात े के आधार पर िोगा। [फा. सं. 05/7/2013-सीएस] मनोि पाण्डेर्, अपर सजचर् MINISTRY OF CORPORATE AFFAIRS NOTIFICATION New Delhi, the 7th March, 2024. S.O. 1131(E).— In exercise of the powers conferred by clause (a) of section 54 of the Competition Act, 2002 (12 of 2003), the Central Government, in public interest, hereby exempts the enterprises being parties to –– (a) any acquisition referred to in clause (a) of section 5 of the Competition Act; (b) acquiring of control by a person over an enterprise when such person has already direct or indirect control over another enterprise engaged in production, distribution or trading of a similar or identical or substitutable goods or provision of a similar or identical or substitutable service, referred to in clause (b) of section 5 of the Competition Act; and (c) any merger or amalgamation, referred to in clause (c) of section 5 of the Competition Act, where the value of assets being acquired, taken control of, merged or amalgamated is not more than rupees Four hundred and fifty crore in India or turnover of not more than rupees One thousand two hundred and fifty crore in India, from the provisions of section 5 of the said Act for a period of two years from the date of publication of this notification in the Official Gazette. 2. Where a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated with another enterprise, the value of assets of the said portion or division or business and or attributable to it, shall be the relevant assets and turnover to be taken into account for the purpose of calculating the thresholds under section 5 of the Act. The value of the said portion or division or business shall be determined by taking the book value of the assets as shown, in the audited books of accounts of the enterprise or as per statutory auditor’s report where the financial statement have not yet become due to be filed, in the financial year immediately preceding the financial year in which the date of the proposed combination falls, as reduced by any depreciation, and the value of assets shall include the brand value, value of goodwill, or value of copyright, patent, permitted use, collective mark, registered proprietor, registered trade mark, registered user, homonymous geographical indications, geographical indications, design or layout- design or similar other commercial rights, if any, referred to in sub-section (5) of section 3. The turnover of the said portion or division or business shall be as certified by the statutory auditor on the basis of the last available audited accounts of the company. [F. No. 05/7/2013-CS] MANOJ PANDEY, Addl. Secy. Uploaded by Dte. of Printing at Government of India Press, Ring Road, Mayapuri, New Delhi-110064 and Published by the Controller of Publications, Delhi-110054.

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