CCI Exemption Limits Temporarily Increased

The government on Friday decided to raise the exemption thresholds for certain business transactions such as mergers and amalgamation from the rules of the Competition Act, 2002. 

The increased thresholds are set at Rs 450 crore for the value of assets and Rs 1250 crore for turnover in India. 

After consulting with the Competition Commission of India, the Central Government increased the value of assets and turnover by 150%, based on the wholesale price index and exchange rate of the rupee.

If the assets that are being acquired or merged, or the turnover of the businesses involved, fall below these amounts, they won’t be subject to certain approvals under the Competition Act. 

The decision to revise the target exemption thresholds is a welcome move, as per Aparna Mehra, partner at Shardul Amarchand Mangaldas & Co. Stakeholders have long called for higher thresholds, as the last revision occurred nearly eight years ago in 2016.

This exemption is applicable for a period of two years.

Furthermore, if only a part or division of a business is involved in the transaction, the value of that specific part or division will be considered for calculating the thresholds. 

The increased thresholds will simplify business processes and reduce compliance burdens for stakeholders, Mehra said. More transactions can now benefit from this exemption, leading to streamlined timelines and reduced costs for transacting parties, she added.

The value will be determined by looking at the book value of assets as shown in the previous year’s audited accounts, adjusted for depreciation. It includes various aspects like brand value, goodwill, copyrights, patents, and other commercial rights.