Founder and Managing Partner ofLAKSHMIKUMARAN & SRIDHARAN,V LAKSHMIKUMARAN holds forth on concentrating on one subject at a time, growing the collective knowledge of his lawfirm, nurturing values, and finding joy in work…His more than 10 years in the Indian Revenue Service, during which time he helped devise key governmentpolicies, was certainly a good grounding for later years to...
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LAKSHMIKUMARAN & SRIDHARAN,V LAKSHMIKUMARAN holds forth on concentrating on one subject at a time, growing the collective knowledge of his law
firm, nurturing values, and finding joy in work…
His more than 10 years in the Indian Revenue Service, during which time he helped devise key government
policies, was certainly a good grounding for later years to come. Today, V. Lakshmikumaran is the Founder and Managing Partner of Lakshmikumaran & Sridharan (L&S), a reputed law firm known for its professionalism, transparency in business dealings, and high ethical standards.
Having handled several high-profile litigations, including before the Supreme Court, various high courts, and judicial and quasi-judicial forums such as the Competition Commission of India (CCI), Competition Appellate Tribunal (CAT), IPAB, CESTAT, National Green Tribunal, and Appellate Tribunal for Foreign Exchange, V. Lakshmikumaran is the go-to guy for many leading Indian and Fortune 500 companies. He is considered an authority on tax, international trade, competition law, and intellectual property (IP) and frequently speaks and lectures on these topics in India and abroad. Under his able supervision, L&S has gone from strength to strength and presently has 39 partners and over 260 professionals. The firm has spread its wings to over eleven cities across India.
LEGAL ERA had a brief chat with him on his work, life, and many things in between. Excerpts from the conversation…
I was working with the Government of India as an IRS officer for about 11 years. I had occasions to brief the then Attorney General of India on important matters on behalf of the government. I also attended some important hearings of the Supreme Court. I found that the decision-making process in the court was very transparent. I therefore felt that my career should revolve around the transparent decision-making process in courts of law. I wanted to assist the courts in laying down new jurisprudence and doctrines which would be landmark cases for others to follow. That is why I started a law firm, way back in 1985.
I do not know whether I have had an illustrious career or not, but I concentrated on one subject at a time. I delved deep into that subject, spent about 10 years trying to understand every nuance of that subject. Thereafter, I added more subjects without losing grip on the earlier subjects. Thus, initially, I concentrated on tax, then added, international trade disputes, IPRs such as patents and trademarks, environmental law, arbitration and corporate law, etc. I wanted to create a rich area of practice and specialize in that area.
Every case has been equally important to me; so, highlighting just one is difficult. But out of various matters that I argued on, classification issues or valuation issues or MODVAT issues and issues related to the determination of whether a product was a medicine or cosmetic made for fascinating cases. Classification and valuation of software/hardware were again interesting and mind-boggling. Similarly, I have argued some landmark cases on MODVAT and CENVAT.
When I started the practice, I was a novice. I started my journey with my brother. There were established law firms and lawyers in India during that time. Slowly, matters started coming to us and we started expanding. I always believe that you get tremendous happiness in sharing knowledge, wealth, and time with others. Our firm's culture is more like a university where attorneys learn while they earn. I give them the freedom to think, contradict, and question me, and I never get annoyed. In this way, the collective knowledge of the firm grows leaps and bounds. Thus, the firm has been evolving for a period of time, and now, I believe it is on the auto-pilot mode.
GST is a welcome measure for the Indian economy. This country, over a period of time, had several indirect taxes, and many of them were not available as credit. Therefore, it had a cascading effect on costing of products. Honestly speaking, I could have never imagined in my life that taxes paid in Maharashtra would be available as credit in Karnataka; today though, it has become a reality.
There can be arguments like GST can be simpler, but I would say that whatever form it has been legislated in, we should celebrate it. The concept of one nation, one tax, and credit of taxes paid in one state available for paying tax in another state is something phenomenal. I sincerely believe that the Indian economy will surge in both domestic and international markets. We should acknowledge the tremendous efforts of the Finance Minister, Revenue Secretary, GST Council, and all others who have been the architects of this tax reform. About whether India is ready, I would say India was ready at least 10 years ago. I think the urgency with which the reform has been introduced is commendable, not condemnable.
GST will surely have a positive impact on the Indian economy. Inflation will come down eventually, though initially, prices may rise temporarily but market conditions and competitive forces will push businesses to reduce prices of most commodities. So, consumers will be happy and the tax base will increase because people will not be ready to buy goods and services from secondary sources that are not a part of the formal economy.
GST has for the first time brought both goods and services under a single tax regime. Resultantly, a four rate slab has been designed for all goods and services keeping the earlier tax incidence in mind and adopting the principle of equivalence while fixing the rates. By and large, rates for commodities have been kept approximately equivalent to the earlier rates with some of them being categorised even in the lower rate slab. In cases, where the commodities have been classified under a higher slab, the availability of increased input credit is expected to offset the impact of the increased rate, which however would be evident only over a period of time. Moreover, the anti-profiteering clause will also ensure that the benefits from increased input credits are passed on to the endconsumers and thus having a positive impact on them under GST regime.
The Service sector is definitely going to feel the impact of the increase in rate from 15% to 18%. However, availability of input credits across various goods and services is likely to reduce the impact thereby bringing down the effective additional cost, if any, for the consumers. Nevertheless, the overall impact on service sector would be dependent upon the type of services being provided and the kind of goods and services procured for their provision.
Keeping the above analysis in mind, it is clear that the impact of GST will vary from sector to sector. For instance, in the case of the pharma sector, medicaments will generally attract GST @ 12% which may be marginally lower than the overall incidence in the earlier regime. However, clarity in respect of continuing with area-based exemptions is further awaited and this may impact the net incidence of the tax. Pharma sector will also benefit from the move away from the MRP-based levy. Though the transitional period may not see much reduction due to uncertainties, the industry is likely to benefit in the long run once GST stabilises. The aviation sector, on one hand, will experience a lower rate of tax @ 5% (economy fare) as compared to 6% in the earlier regime, on the other hand it will have restricted credits on inputs with Air Turbine Fuel (ATF) being the primary cost component, and being outside GST, will nullify the effect of the reduced rate.
Though the telecommunications sector is going to be taxed at 18% as compared to 15% in the earlier regime, the increased credits are expected to mitigate the impact of this increase and thereby lower the overall effective rates for end consumers.
Over the years, we have handled several matters, but an important and complicated arbitration matter was the one involving the import of newsprint on which custom duty was levied, but we successfully argued that the levy was illegal. In the meantime, buyers abandoned goods worth nearly 30 million dollars. This matter went to the arbitrator, which too was successfully handled by us.
I enjoy work. My day starts early in the morning at around 3.30 or 4 am and I go to bed by midnight. I constantly think about matters apart from the time I spend in my prayers and meditation. My family understands me, and they give me that space. They appreciate me, and in fact, encourage me to do more. I do get to spend some private moments with my family. Ultimately, if you find joy in your work, I don't think you need to seek some other joy elsewhere.
I tell my children two fundamental principles: the shortest distance between two points is still a straight line and the easiest thing to do in life is to defend the truth. Never take fees in cash. Always pay taxes fully and on time, and provide the correct advise to clients and not the convenient advise. If you are on the ethical path, the journey as a lawyer is enjoyable.
To all students who are bright and have tremendous capacity and energy, I have only one suggestion. Law is a noble profession and this nobility has to be maintained. Follow the highest form of ethics, and when you take up matters, give everything to those matters. Though to some extent, it is also true that individual lawyers, even if highly capable, cannot solve the most complex problems posed by clients today. They need to be in the company of other intelligent lawyers to provide a total solution. Therefore, the law firm culture has to be nurtured. If they want to set up their own law firms, we should bless them and wish them well. The work available in the market is like the River Ganges - nobody can take it all. We can take only two to three glasses of water. So, there is space for everybody.
I am a half-marathon runner, not a full-marathon runner. I have done about half a dozen half-marathons, and I run about 10 to 15 km every alternate day. I started running very late in my life, at the age of 61. In fact, I was inspired by one of my juniors. She was a runner and she encouraged me to run. I took it seriously and found that the body and mind must cooperate to keep running. I learnt to challenge the body beyond its limit. To be in the park early morning is an exhilarating experience. The mind is clear of all clouding thoughts, memory increases, tranquility comes, and you can see the world in a clear light. This principle not only applies to running but also applies to running an organization. You must challenge yourself, every day.
Yes, at the end of running, muscles pain, but when you stretch, there is further pain and that pain is pleasurable. I learnt that pain can be pleasurable while running and after running.
In my leisure time, I love to read, meditate, and listen to music. I have tremendous love for young kids and play with them. We learn a lot from young kids. Some of the questions posed by them are difficult to answer. In fact, they become my teachers.