Monthly Archives: September 2013

India Recognised As Authorising Nation Under The International Common Criteria Recognition Arrangement (CCRA)

India Recognised As Authorising Nation Under The International Common Criteria Recognition Arrangement (CCRA)Cyber security is an area in which India has still to cover a long gap. India is not only late in this regard but also needs to make its efforts holistic. The National Cyber Security Policy of India 2013 has been declared by Indian government but it is deficient on many counts.

However, the policy is also good on many counts and ensuring malware free software and hardware for Indian use is one such good objective. The cyber security awareness brochures in India have also been prescribed by Indian government.

Companies like Huawei and ZTE have already faced telecom security issues in India. Similarly, India is also considering making the norms for import of telecom equipments in India more stringent. The security agencies of India have gone to the extent of even suggesting for the developing indigenously manufactured cyber security software.

India experts have also suggested starting India’s own social media platforms. India has also proposed a new policy that would give preferential market access (PMA) to domestic telecom manufacturers for government contracts. Clearly, the Indian mood is to support and encourage indigenously manufactured hardware and software components.

The telecom security related issues have also assumed great importance in India. Proposals for testing of hardware and software for imbedded malware have also been mooted in India from time to time. For the time being, the imported software and hardware testing for embedded malware has been postponed till 1st April 2014 by India.

This deadline may not be extended further as India has been granted the status of “Authorising Nation” under the international common criteria recognition arrangement (CCRA) to test and certify electronics and IT products with respect to cyber security. This means that India can now test electronics and IT products and issue globally-valid certificates with respect to cyber security.

Till now, India was having the status of “Consuming Nation” with respect to certification of electronics and IT products. Consuming members in the CCRA cannot issue internationally recognised certificates, but they are free to issue national certificates.

The Standardisation Testing and Quality Certification (STQC) Directorate of Department of Electronics and Information Technology has been operating common criteria certification scheme in the country for the last 5-6 years. Under it STQC undertakes certification of Electronics and IT products after evaluation of the products at its lab in Kolkata. The certificates issued by STQC directorate shall now be acceptable internationally by all CCRA member countries.

Bombay High Court Dismisses Vodafone’s Plea In Transfer Pricing Case

Bombay High Court Dismisses Vodafone’s Plea In Transfer Pricing CaseTransfer pricing laws in India are in much limelight for the past few years. The finance ministry of India is now in the process of devising clear guidelines for contentious transfer pricing cases, especially for handling the grey areas.

Similarly, international transactions and arm’s length price are also under scrutiny of Income Tax Department of India. The Competition Commission of India (Procedure in Regard to the Transaction of Business Relating to Combinations) Regulations, 2011 have also been formulated by the Competition Commission of India in 2011 to regulate anti competition combinations.

In the past, the IT department has launched various proceedings against the telecom service providers of India. For instance, Nokia was accused of violating the transfer pricing laws of India. Even a forensics analysis of Nokia’s computers used to download software in India has been ordered.

Similarly, Shell India received a transfer pricing order from IT authorities of India. A transfer pricing order was also issued against Vodafone India. Reacting to the same Vodafone India threatened to invoke the arbitration proceedings against Indian government.

Meanwhile, Vodafone challenged the transfer pricing order at the Bombay High Court. The Bombay High Court on Friday dismissed the plea of Vodafone India and clarified that transfer pricing authorities of India have the jurisdiction to investigate suo moto any cross-border transactions.

The Court said that Vodafone India has the option to go for an alternative remedy like Income Tax Appellate Tribunal (ITAT). The Court also directed the tax department not to serve an order or final assessment notice till November 30. The Bombay High Court’s decision on Friday focused solely on procedure, like jurisdictional issue, and not on the merits of the Vodafone case.

Vodafone’s major relief point is the judgement given by the Supreme Court of India in its favour. The only option left for India was to formulate and enact a validation law that can cure the defects pointed by the Supreme Court while adjudicating the Vodafone’s case. The government exactly did the same thing by amending 50-year-old tax laws enabling it to make retroactive tax claims on long-concluded corporate deals.

The constitutionality of such retrospective validation law is still to be analysed. However, this retrospective amendment has once again brought to life the dead Vodafone taxation controversy.