Friday, March 15, 2024

New Rules for Calculating Fines by The Competition Commission of India (2024)

The Competition Commission of India (CCI) has introduced new guidelines on March 6, 2024, that explain how they'll figure out the amount of money a business or a person makes. This is important because it helps them decide how big a fine should be if someone breaks the rules under a law called the Competition Act, 2002.

For Businesses:

What Counts in Calculating Your Business's Earnings?

  1. What's Included: The total sales and other money made from the business's main activities. This is based on the business's official financial reports.
  2. What's Not Included:
    • Other kinds of income not from main business activities
    • Taxes on goods and services that are added to the price of what's sold
    • Discounts given to customers
    • Sales within the same group of companies

If Your Business Doesn't Have Official Financial Reports:

  • The money your business made can be confirmed by the company's official auditor or a chartered accountant, along with a formal statement from someone authorized by your business.

If Your Business Deals in Foreign Currency:

  • The money made needs to be converted to Indian Rupees using the average currency exchange rates given by the Reserve Bank of India for that time, as confirmed by a chartered accountant and backed by a formal statement from someone in your business.

For Individuals:

How Do We Calculate What an Individual Makes?

  1. What's Included: Your total gross income as shown in your Income Tax Returns.
  2. What's Not Included:
    • Money made from renting out property
    • Profits from selling assets like stocks or real estate

If You Don't Have Income Tax Returns or Have Special Circumstances:

  • If you haven't filed income tax returns, have filed them in different countries, haven't filed them at all, or you're not required to file them, your total income will need to be confirmed by a chartered accountant. This needs to be backed up by a formal statement from you.

These new rules are set by the CCI to make sure they are fair when deciding on fines for businesses or people who don't follow the competition laws.