Indian subsidiaries of foreign companies can claim SFIS benefit

Yum Restaurants (I) Pvt. Ltd V. Union of India (Delhi High Court), W.P.(C) 7011/2012 & CM 10056/2013, Judgment delivered on: 27.01.2015 Recently, in case of YUM RESTAURANTS (I) PVT.LTD AND Anr. v. Union of India & Ors, Hon’ble Delhi High Court pronounced that there is no provision in the Foreign Trade Policy which debars an Indian subsidiary of a foreign holding company from availing the benefit of Serve From India Scheme (SFIS). The Court took the view that the ‘Served from India’ brand can’t be construed to include only brands of Indian Companies, which are recognized as Indian. Accordingly, it set aside the stand taken by DGFT of disallowing the granting of SFIS to Indian subsidiaries of foreign companies. Furthermore, the Court also held that though the DGFT is empowered to interpret the foreign trade policy, such powers can be exercised only when the plain language of the policy presents an ambiguity, but it It would not be open for DGFT to introduce new conditions and criteria under the guise of interpreting the policy.