Fight Fight

The Business Line reports the beginnings of a lover’s tiff between the TRAI and the DoT. The TRAI is apparently miffed over the latter’s growing indifference to it in the recent past (does anyone suspect adultery?) – particularly over the issue of amending telecom licenses. Excerpts from the news story:

The Telecom Regulatory Authority of India (TRAI) has cautioned the Department of Telecom against taking any decision on policy matters without consulting it.

In a note written to Mr Siddarthha Behura, Secretary, Department of Telecom; TRAI’s Chairman, Mr Nripendra Misra, said that the recommendations of the regulator is required according to existing laws and DoT should keep this in mind to avoid any legal complications.

TRAI said that it had come to know that DoT was planning to amend licence term for unified access service and basic telecom providers.

DoT has been exploring the option of introducing a new breed of telecom licences which would enable foreign and new players to bid for 3G (third generation) mobile spectrum.

According to the the proposal being considered by DoT, this new class of licence will limit the operator to only 3G services without having any right to claim spectrum for 2G (existing mobile services using GSM or CDMA technologies).

BSA Bullshit – How 10% reduction of PC Software piracy in India could lead to additional $200 million tax revenues in US

This is in response to the verbal diarrhea periodically expelled by Microsoft and its Business Software Alliance cohorts suggesting that reducing piracy in India will lead to “Economic Benefits” – including enhanced tax collections to the tune of 200 million USD (now who could say no to that).

Fact is, most big software manufacturers never pay tax in India. Here’s how.
1) Most major software houses’ campuses are located in Software Technology Parks which have been enjoying a 10 year tax holiday since 1999 (extended till 2010). This means that any software that they develop in India and transfer to their parent undertakings abroad are 100% exempt from any taxation. (The normal rate of tax on income from royalty payments is about 10%.)

2) The same finished-software is then resold in India in “shrink wrap” packages. Another tax evasion occurs here. Most shrink-wrapped software that is sold to you, is sold via a chain of extensive distribution agreements instead of directly by the company’s unit in India. You buy Ms Windows from a distributor and not from MS India directly. This is done so that the “permanent establishment” in respect of the software unit sold is the US company and not MS India. By virtue of double taxation avoidance agreements (DTAAs), these companies classify such income as “business income” – taxable in the foreign country – rather than ‘royalties’ that are taxable in India. The implications of this loot are staggeringly high. The recent fight between the CBDT and Microsoft is a case in point where Microsoft has refused to pay income tax to the tune of 700 crore rupees (roughly USD 175 million).(Although the Income Tax Tribunal in this case has insisted that Microsoft is liable to pay the amount, the weight of legal authority seems to suggests that this demand will be overturned in appeal)

So in effect, the current BSA “study” (defying any relation to ‘reality’ that the word might ordinarily indicate) proposes to increase the amount of tax it can loot from India in addition to the USD 175 million that it already does to nearly 375 million through curbs on piracy.

Game’s up BSA^TM. Since I don’t want to doubt your OH-so-genuine concern for my country’s “economic benefits”, howzabout you just pay us the nearly $175 million you’re funnelling away to the US? And we don’t even have to touch piracy. Pay up, or Shut up.

UPDATE: There’s a really good article about this at Rediff.

BSA Bullshit – How 10% reduction of PC Software piracy in India could lead to additional $200 million tax revenues in US

This is in response to the verbal diarrhea periodically expelled by Microsoft and its Business Software Alliance cohorts suggesting that reducing piracy in India will lead to “Economic Benefits” – including enhanced tax collections to the tune of 200 million USD (now who could say no to that).

Fact is, most big software manufacturers never pay tax in India. Here’s how.
1) Most major software houses’ campuses are located in Software Technology Parks which have been enjoying a 10 year tax holiday since 1999 (extended till 2010). This means that any software that they develop in India and transfer to their parent undertakings abroad are 100% exempt from any taxation. (The normal rate of tax on income from royalty payments is about 10%.)

2) The same finished-software is then resold in India in “shrink wrap” packages. Another tax evasion occurs here. Most shrink-wrapped software that is sold to you, is sold via a chain of extensive distribution agreements instead of directly by the company’s unit in India. You buy Ms Windows from a distributor and not from MS India directly. This is done so that the “permanent establishment” in respect of the software unit sold is the US company and not MS India. By virtue of double taxation avoidance agreements (DTAAs), these companies classify such income as “business income” – taxable in the foreign country – rather than ‘royalties’ that are taxable in India. The implications of this loot are staggeringly high. The recent fight between the CBDT and Microsoft is a case in point where Microsoft has refused to pay income tax to the tune of 700 crore rupees (roughly USD 175 million).(Although the Income Tax Tribunal in this case has insisted that Microsoft is liable to pay the amount, the weight of legal authority seems to suggests that this demand will be overturned in appeal)

So in effect, the current BSA “study” (defying any relation to ‘reality’ that the word might ordinarily indicate) proposes to increase the amount of tax it can loot from India in addition to the USD 175 million that it already does to nearly 375 million through curbs on piracy.

Game’s up BSA^TM. Since I don’t want to doubt your OH-so-genuine concern for my country’s “economic benefits”, howzabout you just pay us the nearly $175 million you’re funnelling away to the US? And we don’t even have to touch piracy. Pay up, or Shut up.

UPDATE: There’s a really good article about this at Rediff.

Climate Change

From the Hindu Business Line

New agency in charge of Science and Engineering Research

News from here about the Union Government setting up a “Science and Engineering Research Board (SERB), with a view to enhance the level of basic research and impart autonomy and flexibility in shaping basic research programmes and delivery of funds to researchers.“

Briefing newspersons after a meeting of the Cabinet, the Finance Minister, Mr P. Chidambaram, said the Board will be a high-level empowered body with necessary administrative and financial autonomy chaired by the Secretary of Department of Science and Technology.

On the policy matters it will receive necessary guidance from an oversight committee chaired by a scientist of international repute.

The need for having such a body was felt due to rapid changes in the advanced basic scientific research at the global level with increasing competition every day. A Science and Engineering Research Bill will be introduced in Parliament and the Board will be constituted under the Act.

Drug authority may require patent for approval of biosimilar drugs

The Hind Business Line reports that the Drug Regulatory Authority in India is “considering a proposal wherein generic versions of bio drugs, called biosimilars, may be mandated to apply for patents.”

Biopharmaceutical drugs are medicines produced using a living system or genetically modified organism. Compared to traditional chemical medicines, even a minor change in the conditions, formulation or the processes can change the final product drastically.

Biosimilar medicines are supposed to be replicate versions of original biopharmaceutical medicines designed to treat the same diseases as the innovator’s product. However, compared to generic versions of chemistry based medicines, biosimilar medicines are extremely complex.

The report quotes the Director General of the pressure group ‘Organisation of Pharmaceutical Producers of India’ (which counts among its members several “Big” pharma companies like Pfizer, Eli Lily, Roche and GSK, significantly excluding generic biggies like Cipla and DRL) as approving this idea because of “the complexities involved,”

The very nature of a biologic means it is practically impossible for two different manufacturers to produce two identical biopharmaceuticals if identical host expression systems, processes and equivalent technologies are not used. This has to be demonstrated in an extensive comparability programme. Therefore, a generic biopharmaceutical cannot exist.”

A “Government source” however said that a final view is yet to be taken.

According to Mr. Ray only such stringent measures can facilitate the growth of the biogeneric business.

Ha.