This implies the CCI will have the power to impose penalty on the turnover of a company derived from all products and services across the table. A new provision in the Competition Law pushes for penalty on 'global turnover' for anti-competitive conduct or abuse of power by enterprises, the ministry of corporate affairs said in a notification on Wednesday.
The move could have bearings on foreign enterprises operating in India and Indian enterprises with a global presence. The amendment comes into effect from March 6.
This implies the CCI will have the power to impose penalty on the turnover of a company derived from all products and services across the table.
CCI in December last year had issued draft regulations for ‘turnover determination’, giving time till January 12 for comments. Indirect taxes, intra group sales and discounts would be reportedly excluded from the computation of ‘turnover’.
Levy of penalties on ‘global turnover’ basis could be a big cause of concern for multinational companies operating in multiple jurisdictions globally. The penalty doesn't have to be limited to the product/service under investigation derived from doing businesses in India. It will likely have significant implications on a firm's fund chase moves abroad and increase compliance costs.