India Regulatory Brief: Delhi to Introduce New Environmental Laws, Authorities Issue Notice to Companies Without Women Directors

December 17, 2015 Posted by India Briefing Reading Time: 4 minutes

Delhi Authorities Announce Measures to Combat Air Pollution

The Delhi government announced a series of measures to curb pollution levels in the capital after the Delhi High Court made a statement about Delhi’s poor air quality. These measures include restrictions on plying of private vehicles, shutting down of a coal power plant and other measures, such as vacuum-cleaning roads.

One of the contentious measures announced by Delhi’s Chief Minister Arvind Kejriwal is a limitation on the operation of private vehicles based on their registration number plates: cars with odd or even last digits will be allowed on alternate days except Sundays; however, this scheme will not be applicable to emergency and public transport vehicles. The pilot project will be experimented from 1 to 15 January 2016 and between 08.00 to 20.00. A final plan for implementation will be publicized on 25 December.

The government has encouraged car-polling services and will issue 10,000 additional permits for auto-rickshaws. In addition, 6,000 more passenger buses will be added to the transport system, while the frequency of Delhi Metro services will also be increased. Trucks will not be allowed to enter Delhi until 23.00. The government plans to go ahead with the move in January particularly when air pollution is acute.

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Authorities Issue Notice to Companies Without Women Directors

The authorities have started issuing show-cause notices to at least 2,690 companies that have not yet appointed a woman director on their boards. Out of 10,328 companies registered under the Companies Act, 2013, 74 percent or 7,638 firms have complied with the law which had a deadline of 1 April 2015. While show-cause notices are being sent, no penalty has been specified. According to the Companies Act, every public company with turnover of Rs 300 crore (US $44 million) or more should have at least one woman on their board.

The Securities and Exchange Board for India (Sebi) in April announced a minimum Rs 50,000 (US $745) fine for not abiding with the law, and has also warned of further action, including against promoters and directors, if the companies are non-compliant beyond six months. Earlier in October of this year, the Bombay Stock Exchange (BSE) fined 370 companies following the Sebi policy.

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Government to Modify DTAAs to Address Tax Loss

The government has started negotiations with some countries to amend the provisions on capital gains taxation with regard to Double Taxation Avoidance Agreements (DTAAs). This is because some of the DTAAs allow taxation of capital gains on shares only in the country of which the taxpayer is a resident. Finance ministry officials have stated it is aware of the loss of tax due to such DTAAs, but can’t quantify the tax revenue loss due to a lack of data.

The authorities have further stated that India participates in the Base Erosion and Profit Shifting (BEPS) project undertaken by OECD and G-20 countries, which is aimed at aligning tax of income in the place where economic activity is performed. This also includes ensuring that DTAAs are not used to for tax avoidance.

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