CCI’S Guidance on Calculation of Turnover By Nandish Vyas and Geet Sawhney (Veritas Legal, India)1
The Competition Commission of India (CCI) recently amended its FAQ’s on combination (Amended Combination FAQs), published on its website,2 in order to bring them in line with the Ministry of Corporate Affairs, Government of India (MCA) 2017 notifications regarding (i) exemption from notifying a combination within thirty days3 and (ii) revised de minimis exemption4 as well as clarification on calculation of relevant assets and turnover in case a portion of an enterprise or division or business is being acquired, taken control of, merged or amalgamated. The most notable development in these Amended Combination FAQs includes providing guidance on (i) identification of target (assets/unit/division/enterprise) in variety of merger & acquisitions (M&A) transactions and (ii) calculation of turnover for the purposes of the Competition Act, 2002 (Competition Act). Till recently, there was no set guidance provided by the CCI as to how party(ies) to an M&A transaction should calculate its/their turnover. Further, between 2016-17, the CCI imposed penalty ranging from INR 0.2 million (USD 2,867/EUR 2,521) 5 up to INR 10 million (USD 0.14 million/ EUR 0.12 million) on the acquirers’ for their failure to notify transaction involving acquisition of portion of an enterprise/division/business due to incorrect calculation of turnover for de-minimis/target based exemption.6 However, A…
