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New Straits Times
20-05-2025
- Automotive
- New Straits Times
Lemon law on the table to protect car buyers
KUALA LUMPUR: The Domestic Trade and Cost of Living Ministry has drafted a cabinet paper proposing amendments to the Consumer Protection Act 1999 to include "lemon law" provisions, aimed at bolstering consumer rights in the automotive industry. Deputy Minister Fuziah Salleh told the New Straits Times that the paper will be submitted for policy approval at the cabinet level before amendments to the act are implemented. She said the ministry is currently obtaining feedback from relevant ministries and agencies, such as the Finance Ministry, the Attorney-General's Chambers, Economy Ministry, Transport Ministry and Investment, Trade and Industry Ministry. Fuziah said this follows the completion of a six-month legal study on lemon law, conducted from June to November last year. The study was initiated to assess and recommend the necessary steps to be taken to enhance consumer protection in the automotive industry. "Based on the findings of the study, the ministry concluded that there is a need to establish a specific legal framework such as a lemon law to address issues and limitations related to consumer protection in the automotive industry. "Since the Consumer Protection Act already provides mechanisms for remedies and dispute resolution in line with the fundamental principles of lemon law, the ministry is of the view that it is appropriate for these legal principles to be integrated through amendments to the act. "This would strengthen the existing provisions and establish new regulations that will outline more detailed procedures or mechanisms for dispute resolution, particularly for compensation claims involving new vehicles. "Integrating these principles through amendments to the act is seen as a practical and effective approach," she said. Currently, there are four existing legislations with lemon law features namely the Consumer Protection Act, the Contract Act, the Sale of Goods Act and Hire-Purchase Act 1967.
Mint
20-05-2025
- Business
- Mint
Jumping jobs? A Supreme Court judgement just made it tough, especially for freshers
In a development that has the potential to lower attrition rates across industries, a Supreme Court judgement late last week allowed employers to enforce a service bond. The court order clarified that companies can mandate a minimum tenure and recover training costs from employees who leave prematurely without worrying that it will violate the country's contract law. The judgment stemmed from a dispute where an employee–Prashant B. Narnaware of Vijaya Bank–was required to pay ₹2 lakh as 'liquidated damages' for quitting his job before completing a mandatory three-year service. While the Karnataka High Court ruled in favour of Narnaware, the apex court reversed the judgement in its order on 16 May. 'From the prism of employer-employee relationship, technological advancements impacting nature and character of work, re-skilling and preservation of scarce specialized workforce in a free market are emerging heads in the public policy domain which need to be factored when terms of an employment contract is tested on the anvil of public policy," the court said in its order that has been seen by Mint. Also read: Beyond the layoffs: Startup hiring cools as AI, money worries sweep businesses The order further stated that the service bond in Vijaya Bank's appointment letter did not constitute a 'restraint of trade"–a legal principle enshrined in Section 27 of the Contract Act that typically prohibits agreements restricting someone's right to practice a lawful profession–and was also not opposed to public policy. Experts said the ruling would pave the way for both public and private sector firms to incorporate and enforce such clauses to protect their training costs and curb early attrition, as long as they keep the terms reasonable and accurately estimate the costs involved. For instance, 'training bonds'–meant for freshers and junior roles–are already popular in the IT and ITeS sector. Typically ranging from six months to a year with amounts between ₹50,000 and ₹1 lakh, these bonds cover the costs of training new employees and are also used when employees are sent abroad for projects, recognizing the exposure and experience gained. The latest order will see widespread adoption of such practices beyond the IT and ITeS sector, experts said. Also read: Code junkies make way for AI pros as skills landscape shifts 'The employer can implement such a term of employment and enforce it in case of breach by the employee, by recovering the costs incurred including for training," said Vikram Shroff, partner for employment law at AZB & Partners, while adding that companies need to ensure that 'conditions imposed are reasonable in nature and are not treated as restraint of trade". At the same time, lawyers point out that it cannot be a penalty. 'The amount payable under bond is not a penalty, as penalty is non-enforceable. It would be in the nature of liquidated damages, which assumes general pre-estimate of damages," noted Arka Majumdar, employment law partner at Argus Partners. The judgement comes at a time when hiring is going through a sluggish period but companies remain vulnerable to losing their top talent. During the pandemic and for a year after that, attrition was at record highs with employees moonlighting, juggling counter offers and leaving within months. The latest order will impact quick exits in many firms, if applied. 'Pursuant to the latest judgement, employers across sectors may now feel more confident about including such provisions in their contracts, but it remains critical that these are carefully drafted," said Anshul Prakash, partner for employment labour and benefits at law firm Khaitan & Co. Also read: Mark My : You are now reporting to your colleague or your junior! Prakash pointed out that a bond period of one-three years and compensation reflecting actual training costs or a reasonable estimate is 'likely to be enforceable". The amount should not be disproportionate to the employee's salary or arbitrary. Both private and public sector firms are likely to follow suit. 'While the order pertains to PSUs, it is not limited to PSUs only and it could lead to private players reworking their employment contracts," said Adil Ladha, partner at Saraf and Partners. 'What constitutes training costs and how much should be recoverable in case of an early exit will be decided by companies on their own and, therefore, employees must pay attention to such clauses." However, Majumdar of Argus Partners expects public and private sector service bonds to be assessed differently, with courts applying more scrutiny to private sector bonds.
Time of India
05-05-2025
- Business
- Time of India
Online gaming equals gambling, taxable at 28% GST: Centre tells Supreme Court
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads The Directorate General of GST Intelligence ( DGGI ) on Monday told the Supreme Court that online gaming companies indulge in betting and gambling and the amounts that are staked in the games by the participating players on their platforms are solicitor general N Venkataraman, appearing for the department, in his opening arguments told a bench led by Justice JB Pardiwala that the department is not taxing the online/offline gaming but its 'speculative outcomes' which amount to betting and gambling. 'Speculative outcomes are considered relevant for taxing. Whether rummy is a game of skill or chance has no relevance. These games are nothing but gambling only... online activity is indeed betting and gambling activity.'He questioned that when playing with stakes is gambling and is not excluded, how is it open for the gaming companies to contend to the contrary?The ASG said that the online gaming industry has been paying goods and services tax (GST) considering its activity as a service, taxable at 18%, but these activities are characterised as betting and gambling and hence taxable at 28% GST under the CGST a Constitution bench judgement in the case of Satyanarayana, he said that the apex court had laid down the principle that playing a game for stakes based on an outcome which is unknown at the time of staking is betting and gambling and also declared so in terms of Section 30 of the Contract Act making no distinction of the underlying game played as a game of skill or a game of chance. 'Is it open for the gaming companies to contend that playing for stakes on a game of skill would not amount to betting and gambling?, he told the apex court is hearing a huge batch of petitions related to show-cause notices to the tune of Rs 1.12 lakh crore issued by the DGGI to online gaming companies and casinos over alleged tax evasion. The top court had earlier in January stayed the showcause notices and posted the matter for final hearing in to the government, 'The cumulative tax effect in all these show-cause notices is approximately to the tune of Rs 91,684.81 crore alone vis-à-vis online gaming companies and Rs 1,08,505 crore including casinos.'The final judgment in this case is expected to have far-reaching implications for the taxation framework of the online gaming industry as clarity on its tax treatment is crucial for fostering a predictable business environment and ensuring regulatory compliance, according to legal DGGI had raised a tax demand of Rs 1.12 lakh crore against 71 online gaming companies. The show-cause notices were issued after the government clarified that all online games involving betting and gambling, irrespective of skill or chance, would attract 28% GST on the full-face value of the bets from October 1, 2023. The government is of the view that some of these online gaming companies leveraged the lack of clarity on taxation of games of chance and those of skill—the latter then being liable to a lower rate--before October 1 and a uniform 28% GST on the full vlue of bets placed on the platforms was government also amended the GST law in August 2023, making it mandatory for overseas online gaming companies to register in India from October 1, 2023. The online gaming companies have sought clarity as the government is retrospectively imposing 28% GST on the 'full value of the bets placed, and not on the gross gaming revenue.'The gaming firms, including Delta Corp. Ltd, Head Digital Works and Play Games 24x7, besides the E-Gaming Federation of India, then challenged the government's decision to retrospectively impose 28% GST on the full value of the bets placed, and not on the gross gaming revenue. The companies say this will force them out of notices raised GST demands on the 'buy-in' amount for each game and the proceeds, reasoning that the staking of money in online games--whether of skill or chance--amounted to betting and gambling, according to the gaming companies. The 'buy-in' constituted a transfer of goods as actionable claims, according to petitioners challenging the notices. The online gaming companies say that there is no supply of actionable claims by the online operator to players, and hence the levy of GST was 'unsustainable.'The apex court had in April last year transferred to itself around 51 petitions challenging the government's decision to impose 28% GST on all online gaming companies. These petitions, filed by online gaming companies and casinos, were pending in nine different high courts across the SC tagged these petitions with the pending GamesKraft case and various appeals filed by the E-Gaming Federation, Play Games24x7 and others pending before the apex court. Gameskraft was accused of promoting online betting through games like Rummy Culture, Gamezy and Rummy top court had in September 2023 stayed the Karnataka High Court judgment overturning the DGGI order imposing a Rs 21,000 crore GST demand on the Bengaluru-based online gaming platform.
