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Approvals, Registrations and Authorizations Required for Establishing an Indian Satellite tv for pc System and Provision of Satellite tv for pc Providers by Satellite tv for pc Operators in India
In my earlier articles on provision of satellite tv for pc companies in India, we analyzed the regulatory framework and the doable entry choices obtainable to international satellite tv for pc operators to ascertain its enterprise presence in India and supply satellite tv for pc companies within the Indian subcontinent. One of many entry possibility is establishing an Indian Satellite tv for pc System (“ISS”) by the international satellite tv for pc operator for offering satellite tv for pc based mostly companies on a business foundation in India and be eligible for all of the preferential remedy accorded to such programs in service provisioning in India. For the needs of building an ISS, the international satellite tv for pc operator and/or home Indian firm, because the case could also be, (“Satellite tv for pc Firm”) would want to acquire numerous approvals and registrations with the Indian regulatory authorities.
Incorporation of the Indian Firm
For the needs of establishing of an ISS, Satellite tv for pc Firm would want to include an organization (“Newco”) beneath Indian legal guidelines. Below the Firms Act, 1956 of India, an organization restricted by shares could also be integrated both as a non-public firm or as a public firm. Below tax and different statutes and rules, personal and public firms are ordinarily handled equally. Subsequently, Satellite tv for pc Firm could think about incorporating Newco as a non-public firm.
Registration with CAISS
Within the 12 months 1997-1998, the Authorities of India (“GoI”) introduced the Satellite tv for pc Communication Coverage Framework (“SatCom Coverage”) and formulated the norms, tips, and process for registration of Indian satellite tv for pc programs by personal Indian firms and allowed restricted use of international satellites (i.e., uplink from India) in particular circumstances offered the satellites had been coordinated with the INSAT satellites. Pursuant to the SatCom Coverage, the GoI licensed Indian Area Analysis Group (“ISRO”) to arrange a Committee for Authorizing the institution and operation of Indian Satellite tv for pc Methods (“CAISS”), with its Secretariat on the Satellite tv for pc Communication Applications Workplace at ISRO Headquarters at Bangalore.
For the needs of registration with CAISS, Newco would want to submit an in depth undertaking proposal to CAISS stating particulars of its undertaking together with the goals, aims and background of Newco together with its fairness construction; the satellite tv for pc proposed to be launched or leased, spacecraft description, manufacturing and launch particulars of the satellite tv for pc, capabilities of all payloads and system, community description and traits, orbit spectrum necessities, spacecraft launch car; information and site of satellite tv for pc launches proposed by Newco, and so forth.
The Satellite tv for pc Coordination Programme Workplace, which serves because the Secretariat of CAISS, critiques and examines the appliance in gentle of the SatCom Coverage and the norms and tips and procedures accredited by the GoI. The Secretariat will, thereafter, put up the appliance for CAISS’ consideration.
When it comes to DoS’s Inside Guidelines for the approval course of, the applicant firm is required to offer its orbit-spectrum necessities with alternate decisions indicating precedence and the applicant firm should have an orbital slot previous to submitting an utility to CAISS.
As soon as CAISS grants its approval for working the satellite tv for pc system, Newco might want to coordinate with Wi-fi Planning & Coordination Wing to provoke inter-system co-ordination and subject authorization to function the satellite tv for pc in accordance with the ITU Radio Rules. The GoI may additionally authorize Newco to immediately co-ordinate with different satellite tv for pc programs operators on technical features. The ISS implementation standing would proceed to be monitored by CAISS.
Overseas Funding Approval
GoI’s international direct funding (“FDI”) coverage in Indian firms both by establishing of wholly owned subsidiaries or joint ventures is regulated by the Overseas Trade Administration Act, 1999, and the Overseas Trade Administration (Switch or Challenge of Safety by an individual resident outdoors India) Rules, 2000 (“FDI Rules”). When it comes to the FDI Rules, FDI is allowed on an computerized foundation in nearly all sectors besides the place the proposal (i) requires an industrial license; or (ii) falls outdoors notified sectoral coverage/caps or beneath sectors by which FDI will not be permitted; and so forth.
Proposals which don’t fulfill the parameters prescribed for computerized approval, require prior approval from the Overseas Funding Promotion Board (“FIPB”) which is a reliable physique functioning beneath the Division of Financial Affairs, Ministry of Finance, to contemplate and suggest FDI. The FIPB consists of members from the Division of Financial Affairs, Division for Industrial Coverage & Promotion, Division of Commerce, Ministry of Exterior Affairs, amongst others.
When it comes to the FDI Rules, an Indian firm can obtain international fairness funding upto 74 % to ascertain and function Indian satellite tv for pc programs topic to acquiring prior FIPB approval. As soon as FIBP approval is obtained, the Indian firm can immediately obtain funds by way of banks licensed to deal in international alternate and subject shares to international investor topic to submitting prescribed stories with the Reserve Financial institution of India (“RBI”) inside 30 days from receipt of the share consideration quantity and subject of shares to the international traders.
Satellite tv for pc Firm might want to submit an in depth utility with the FIPB for acquiring its approval for international funding. The appliance would should be supported by paperwork together with the brochures and profiles of Satellite tv for pc Firm or its associates, marketing strategy/undertaking report, memorandum and affiliation of articles of Newco (if Newco has already been integrated), and so forth.
Submission of Report back to the RBI
As soon as Satellite tv for pc Firm obtains FIPB approval, Newco would want to obtain funds from Satellite tv for pc Firm by the use of inward remittances by way of banking channels and submit a report with the RBI with in 30 days from the receipt of the quantity of consideration.
Upon receipt of the funds, Newco can subject shares to Satellite tv for pc Firm and submit a report (within the prescribed type) along with an applicable certificates from the corporate secretary of Newco. The worth of shares to be issued by Newco to Satellite tv for pc Firm would should be not lower than the truthful valuation of shares accomplished by a chartered accountant as per the rules issued by the erstwhile Controller of Capital Points.
Miscellaneous Licenses and Registrations
Newco would want to acquire further registrations and licenses together with a everlasting account quantity and tax deduction account quantity beneath the Earnings Tax Act, 1961, registration beneath the Outlets and Institutions Act, and commerce tax {and professional} tax registrations relying on the State by which Newco is registered/integrated. The working licenses for companies to be offered by the ISS (along with being a satellite tv for pc operator, if any), will should be obtained individually from the involved administrative departments just like the Division of Telecommunication for telecom companies and the Ministry of Data and Broadcasting for TV and radio broadcasting.
There may be presently just one ISS in India, which is Agrani (Zee Group/Dish TV enterprise). Agrani has nevertheless to date not been capable of arrange a satellite tv for pc system although it has entered right into a long run collaboration with ProtoStar I Ltd. for lease/buy of transponder capability. No different utility is presently pending earlier than the CAISS for its consideration for establishing an ISS.
My subsequent article on the topic will take care of the process and prices concerned for registration of Newco as an ISS with CAISS in India.
Seema Jhingan
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Source by Seema Jhingan
