Foreign Direct Investment (FDI) is a significant avenue for entering the Indian market. While foreign investors can opt for direct investment, another route involves investing indirectly through an Indian entity. This form of foreign investment is commonly referred to as downstream investment or Indirect Foreign Direct Investment (FDI). Under the existing Foreign Exchange Management Act, 1999 (FEMA) and its regulations, an Indian entity that receives indirect foreign investment must adhere to entry routes, sectoral caps, pricing guidelines, and other relevant conditions applicable to foreign investment. Compliances for Downstream Investment The FEMA (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 stipulate specific compliances for Indian entities making downstream investments into other Indian entities, considered as indirect foreign investment: Apart from the mentioned compliances, downstream investment must also adhere to entry routes, sectoral caps, pricing guidelines, and other conditions applicable to foreign investment. The term “other attendant conditions as applicable for foreign investment” remains broad and lacks a specific definition in FEMA NDI Rules. Deferral Payment Condition under Rule 9(6) The term “other attendant conditions” is partly covered by the deferral payment condition outlined in Rule 9(6) of FEMA NDI Rules. This rule addresses deferred consideration and indemnity payable by Foreign Owned or Controlled Companies (FOCCs). According to this rule, deferred consideration should not exceed 25% of the total sale consideration, and the deferral period should not exceed 18 months from the date of the transfer agreement. It’s crucial to note that Rule 9(6) pertains to the transfer of equity instruments of an Indian company between a resident and a non-resident. Given that an Indian entity, even if FOCC, is considered a “person resident in India,” Rule 9(6) may not apply to transactions between two residents in India. Conclusion The application of Rule 9(6) of FEMA NDI Rules, focusing on deferred payment considerations, seems limited to transfers between a resident seller and a non-resident buyer. For transactions between two residents in India, even if one is an FOCC, Rule 9(6) may not be applicable. In summary, a harmonious reading of FEMA provisions suggests that Rule 9(6) dealing with deferred payment considerations may not apply to the transfer of equity shares between a resident seller and a person resident in India, even if the latter is an FOCC. Understanding and navigating these regulatory nuances are crucial for entities engaged in downstream investment.

A large language model (LLM) chatbot, ChatGPT, was developed by an artificial intelligence company named OpenAI based in San Francisco. As the name suggests, ChatGPT is a form of chatbot that has the capability of interacting in a surprisingly conversational and dialogue form. It provides responses that can appear to have been provided by a human. Since ChatGPT is a large language model, therefore, it is first essential to know what does a large language model means. These models are specifically created with enormous amount of data in a way so as to accurately predict which word comes next in a sentence. These large language models predict the upcoming word in a series of words in a sentence and the following sentences. It may be called an auto-complete which writes down paragraphs and pages of content by the predicting the words to follow. But the problem with this lies in the fact that the large language models are mostly limited, which is why they are incapable of understanding and analyzing exactly what a human mind wishes to write. ChatGPT comes into play here, as it has been built with the improved state of the art, with the Reinforcement Learning with Human Feedback (RLHF) training. ChatGPT has been trained to attain a way of responding in a human way and has also been designed to learn a dialogue, which is why it has the ability to converse and respond like the humans. Basically, it was trained using a technique called Reinforcement Learning with Human Feedback (RLHF) that makes the use of human feedback that helps ChatGPT to comprehend the task of following instructions given by a person and in turn, provide acceptable responses. Advantages and uses of ChatGPT Personalized customer service is one of the main benefits of utilizing ChatGPT. Without human assistance, ChatGPT can offer 24/7 rapid and effective customer service which may utilize consumer information to personalize conversations and enhance users’ overall experiences, which will also increase customer satisfaction and cut down on wait times. It goes without saying that by doing routine jobs like responding to commonly asked queries, these AI chatbots enhance productivity by freeing up human employees to concentrate on more difficult tasks. Additionally, organisations may save a lot of money by taking the help of a chatbot like ChatGPT. It reduces corporate expenditures by doing away with the requirement for human customer support personnel. Talking about benefits of ChatGPT, it also helps in the medical industry by summarizing huge volumes of medical records which are based on the patients’ family history, lab results, symptoms, and in turn benefitting the industry by providing a more effective diagnosis. Disadvantages of ChatGPT One of the major disadvantages of ChatGPT is its possible use in phishing and malware attacks. Phishing emails and messages may be written convincingly by hackers using AI-powered chatbots, such as ChatGPT, making them harder to spot and avoid. These chatbots may mimic writing styles and make it seem as though they are coming from a reliable source, duping users into disclosing private information or installing malicious software. Additionally, the ability of chatbots to create malware programmes and execute cyber-attacks may help malware spread quicker to a large number of users, ultimately making it more challenging to spot and halt the attack. Apart from these malware and phishing concerns, another concern which raises the alarm is privacy issues. The usage of ChatGPT in customer service may raise issues regarding data privacy and the collection, storage, and use of personal sensitive information. These chatbots could gather and retain information like name, email address, and other information that could be exposed to data breaches and other cyber-attacks. Legality of ChatGPT Speaking about legality, as of now, there is no specific legislation pertaining to it. ChatGPT is banned at numerous schools and institutions, notably in India, France, and the US. This ban comes from the concern that students are gaining an unfair advantage by getting a detailed response on the topics for articles and assignments. This is resulting in their knowledge being underdeveloped by misusing ChatGPT. However, if we look further, a Columbian judge had recently used ChatGPT to dictate a judgment. Hence, legal implications of ChatGPT are still in debate and not yet decided. For the inclusion of ChatGPT in the Indian legal framework, the legal IT framework needs to be amended accordingly. Regarding the issue of liability for content created by ChatGPT, given that the AI tool is typically used in the manner of a search engine and receives input from users, ChatGPT may be considered an “intermediary” as defined by the Information Technology Act 2000. It will, therefore, be qualified for the safe harbour protection that is granted to intermediaries. The liability for the content used to train ChatGPT, there is of course, uncertainty on how such content has been secured, including the remuneration for such access. Also, in the case where ChatGPT is being used very often, concerns about the copyrighted materials, used to train it, are expected to come up. Conclusion It may be stated that ChatGPT is a wonderful technology, which is a prime illustration of how quickly AI can reach the masses. However, there is still a plethora of legal issues and concerns that could prevent its widespread use. This AI-generated chatbot also comes with its limitations, for instance, it can only provide answers that are based on the data it has been trained on. Hence, to conclude, it would be right to state that the use of such AI has to be regulated by bringing amendments to the IT laws and to develop a highly trained unit, dedicated for the monitoring of such AI. As helpful as ChatGPT is in our day-to-day activities, its related concerns also needs addressing. Hence, placing complete reliance on AI may turn out harmful in terms of privacy breach or data theft.

The 50th meeting of the Goods and Services Tax (GST) Council, chaired by the Hon’ble Union Finance and Corporate Affairs Minister, Ms. Nirmala Sitharaman, took place on July 11, 2023. This significant meeting resulted in crucial decisions impacting the online gaming industry, horse racing businesses, healthcare, automobile sector, and the food and beverage (F&B) industry. Uniform Tax Rate on Online Gaming and Horse Racing The GST Council, in collaboration with the Group of Ministers, recommended the imposition of a uniform tax rate of 28% on online gaming, casino activities, and horse racing businesses. This decision aimed to simplify the tax regime and concluded the longstanding debate on whether online gaming is a game of skill or chance. The 28% tax rate will be applicable to the face value of chips in casinos, the full-face value of bets in horse racing, and the Gross Gaming Revenue (GGR) or the full value of bets in online gaming. Finance Minister Sitharaman clarified that the intention was to streamline taxation in the online gaming sector without delving into the complexity of distinguishing games of skill from games of chance. The decision aligns with the regulations set by the Ministry of Electronics and Information Technology (MeitY). Exemptions and Clarifications The GST Council also granted exemptions on the importation of cancer medicines, drugs used for treating rare diseases, and food designed for special medical purposes. Additionally, utility vehicles, meeting specific parameters related to length, engine capacity, and ground clearance, will attract a 22% cess over and above the GST rate. The move aimed to provide clarity in assessing vehicles based on objective parameters rather than model names. In the Food and Beverage sector, the council made significant amendments. Uncooked/unfried snack pellets will now attract a 5% GST rate, and payments of GST on such products during the past period will be regularized “as is.” The supply of food and beverages in cinema halls will now be taxed at a reduced 5% rate instead of the previous 18%, as long as they are part of a service and supplied independently of cinema exhibition services. This move is expected to enhance audience access to theaters by reducing costs and improving the overall cinema experience. Conclusion The decisions taken during the 50th GST Council Meeting reflect the government’s efforts to simplify tax structures, provide exemptions in critical sectors, and promote positive changes in the F&B and entertainment industries. The move towards a uniform tax rate in online gaming demonstrates a commitment to streamlining regulations in a rapidly evolving digital landscape.

The article discusses the taxability of online/digital rummy played on Gameskraft Technologies’ platform under the CGST Act. The conclusions are based on a legal case and the court’s analysis of the distinction between games of skill and games of chance. According to the court’s decision in the All India Gaming Federation v. State of Karnataka case, games like rummy, whether played online or offline, with or without stakes, are considered games of skill. The court emphasizes the test of predominance in determining whether a game is skill-based. The article points out that wagering contracts are acknowledged as part of business under Section 2(17) of the CGST Act. However, lottery, betting, and gambling are not considered the same as games of skill, and their interpretation under Entry 6 of Schedule III excludes games of skill. Terms like “betting” and “gambling” are not applicable to online rummy on Gameskraft and similar skill-based games, whether played with or without stakes, according to the article. Taxation of games of skill falls outside the scope of “supply” under Section 7(2) of the CGST Act, and Entry 6 in Schedule III excludes actionable claims related to games of skill from the purview of goods or services. The article provides background on the legal journey of the case involving Gameskraft Technologies Pvt. Ltd., highlighting the company’s platform fee, GST deposition, and the alleged involvement in betting and gambling. The court’s analysis involves a comprehensive examination of provisions in the CGST Act, emphasizing the retroactive amendment of Section 7. The court’s findings suggest that activities akin to wagering are included in the definition of “business” under Section 2(17), considering the rule of ejusdem generis. The article delves into the definition and scope of “betting and gambling,” emphasizing that Schedule III explicitly excludes them from actionable claims for taxation purposes. Referring to the State of Karnataka v. State of Meghalaya case, the article draws parallels between the Constitution and the CGST Act, concluding that terms like “betting” and “gambling” in Schedule III should be interpreted similarly. The court dismisses arguments against rummy played with stakes, asserting that it involves skill and value judgments, ultimately falling under the category of games of skill. In summary, the article provides a detailed analysis of the legal perspective on the taxability of online/digital rummy on Gameskraft Technologies’ platform, emphasizing the distinction between games of skill and games of chance under the CGST Act.

The concept of the Public Trust Doctrine, stemming from Roman law, has found an expansive scope in recent times. It imposes a duty on the state to safeguard environmental resources for the public’s benefit. This doctrine, evolving as a tool to combat various forms of environmental degradation, has influenced environmental policy legislation globally. In India, the Public Trust Doctrine aligns closely with the constitutional principles, particularly under Article 21, which emphasizes the right to life. The Indian judiciary, recognizing environmental-ecological preservation as a fundamental value, has woven the public trust doctrine into its legal fabric. Landmark Case: C. Mehta v Kamal Nath: The doctrine’s explicit application in Indian jurisprudence began with the watershed case of M.C. Mehta v Kamal Nath. Here, the Supreme Court addressed a situation where the State Government leased riparian forestland to a private entity for commercial purposes, threatening environmental harm. The court emphasized that certain resources, such as air, water, and forests, hold such significance for the public that privatizing them would be unjust. The State, according to the court, acts as a trustee of these resources, obligated to protect them for public use. The ruling firmly established the public trust doctrine as an integral part of Indian law. The court stated that every generation owes a duty to conserve natural resources for succeeding generations. It underlined that rivers, forests, and minerals constitute the nation’s natural wealth, not to be squandered by any single generation. The application of the public trust doctrine was deemed essential in all Indian ecosystems. In the absence of specific legislation safeguarding natural resources, the court invoked the public trust doctrine to hold the Himachal Pradesh government accountable for leasing ecologically fragile land. The polluter pays principle was applied, compelling the developer to compensate for the environmental restitution. Implications and Future Directions: This landmark case underscored the clash between those advocating for the pristine preservation of natural resources and administrative entities encroaching upon them. The court’s directive for compensation showcased the practical application of the public trust doctrine when legislative protection is lacking. As India progresses, ongoing dialogues and legal developments will continue to shape the contours of the Public Trust Doctrine. Its integration into the legal framework reflects a commitment to balance development with environmental preservation, echoing the nation’s responsibility to future generations.