The Competition Commission of India (CCI) invites feedback on the proposed rules for determining company turnover/income from December 22, 20223 to January 12, 2024. The comments may be submitted only by properly filling up the form available on the website of the CCI become .

The Competition Commission of India (CCI), in its draft penal rules, has come up with a proposal to exclude indirect taxes, trade discounts and intercompany sales while calculating a company's turnover for imposing penalties related to violations of competition laws.

To solicit inputs from the public by January 12, 2024, CCI has opened a window for comments on a set of regulations known as the CCI (Determination of Turnover or Income) Regulations, 2023. These regulations are intended to implement the amended provisions of the Competition Act. See the official link to the draft regulations Here.

The aim of the proposed standards is to create a comprehensive and transparent framework for assessing turnover or income for both companies and individuals. This framework considers various scenarios and emphasizes the importance of proper certification and documentation.

Meanwhile, CCI Chairman Ravneet Kaur, while speaking at the 96th Annual General Meeting of FICCI on December 8, mentioned that the settlement and commitment regulations to implement the recent amendments to the Competition Act, 2002 will be published soon. It is noteworthy that two different draft regulations for comparison and obligation to provide feedback have already been distributed to the public and stakeholders.

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Earlier this year, the government made key changes to competition law, including significantly improving deterrence measures. This included the introduction of a penalty that would be applicable to the global turnover or income of companies accused of stifling competition.

According to this provision, the penalty can be up to 10 percent of the average turnover or income of the last three years for any company that is party to an anti-competitive agreement or abuses its dominant position. This penalty is calculated based on worldwide sales or income in accordance with the regulations set by the CCI.

The Competition (Amendment) Act, 2023 amended, inter alia, Section 27, 48 and Section 64 of the Act and empowers the CCI to make rules for imposing penalties on companies and/or persons on the basis of the turnover or income of that company and /or person. In addition, it is provided that turnover or income is determined in the manner specified in the regulations. The CCI proposes the draft Determination of Turnover or Income (CCI) Regulations, 2023, which provides for determination of turnover or income for the purposes of Section 27(b) and Section 48 of the Act. – Competition Commission of India

According to the CCI, if a company is required to prepare consolidated financial statements under Section 129 of the Companies Act, 2013 or any other applicable law, the turnover or income will be derived from the audited consolidated financial statements.

If audited financial statements are not available, the turnover shall be the amount certified by the company's auditor and supported by an affidavit from a person authorized to sign the financial statements.

For companies without an auditor, the turnover corresponds to the amount certified by an auditor and supported by an affidavit of a person authorized to sign financial statements in accordance with the CCI.

The determination of the income of an individual is described as follows: Firstly, it is based on the gross total income as stated in the Income Tax Returns (ITRs) under the Income Tax Act, 1961 and rules thereunder. Secondly, if ITRs are not available, have been filed in multiple jurisdictions, or have not been filed in any jurisdiction, the income will be determined as the total income certified by an auditor, supplemented by an affidavit from the individual. Thirdly, for individuals who are not required to file ITR, income is determined as total income certified by a chartered accountant and supported by an affidavit of the individual.