The Competition Commission of India has proposed that indirect taxes, trade discounts, and intra-group sales will not be considered while computing the turnover of an entity for imposing a penalty for any violation of the rules. The fair trade regulator has invited stakeholder comments on the proposed regulation by January 12 next year, according to a notice.
The measure is aimed at framing norms for the purpose of imposition of penalties on enterprises and persons based on turnover or income of such enterprises and persons.
"Turnover or income, as the case may be, includes the total value of sales or revenue or receipts, by whatever name called, and other operating income, as per the audited financial statements maintained by such enterprise. The turnover or income shall exclude indirect taxes, trade discounts, and intra-group sales, if any.
"The Competition (Amendment) Act, 2023, inter alia, amended Section 27, 48 and Section 64 of the Act empowers the CCI to frame regulations for the purposes of imposition of penalty on enterprise and/or person based on turnover or income of such enterprise and/or person," CCI said.
Under Section 27 of the Competition Act, 2002, the CCI can impose penalties on enterprises or individuals for participating in anti-competitive agreements or abusing a dominant position.
In case an enterprise, it is required to prepare a consolidated financial statement under the rules, turnover or income shall be derived based on such audited consolidated financial statements and if the audited financial statements are not available, the turnover should be determined based on the amount certified by the statutory auditor of the firm, it added.
For individuals, the income should be based on the gross total income as per the Income Tax Returns (ITRs) under the IT Act rules, and if the individual is not required to file an ITR, the total income shall be certified by a chartered accountant, supported by an affidavit, as per the competition watchdog.
These norms aim to provide a comprehensive and clear framework for determining turnover or income for enterprises and individuals, considering various scenarios and ensuring proper certification and documentation.
Source Name: Economic Times