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Thursday,
December 19, 2002, Chandigarh, India  
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US court backs Dr Reddy’s drug
UTI FIASCO
Cut interest rate for SSI: RBI
Sales tax on MRP to affect industry
Punjab to emerge as hub for ITES
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India may rethink strategy Sensex looks up
HCL Info unit, HCL Tech to be merged
i-flex opens centre in Singapore
Software exports from Gurgaon to touch 4200 cr
Tax collections up 15%
Conseco files for bankruptcy Vodafone chief to step down Corpn Bank, BoR to share ATM Govt to close down 66 NTC mills Charminar Bank to be reopened GRAPHIC:
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US court backs Dr Reddy’s drug
New Delhi, December 18 ‘’A US court has dismissed the Pfizer complaint on the grounds that the patent term extension does not cover Dr Reddy’s Amlodipine Maleate product.’’ Dr Reddy’s said in a statement here. The company said it expected to launch its product in August, 2003, upon expiration of Pfizers paediatric exclusivity and receipt of a final approval from the US Food and Drug Administration. ‘’The favorable court ruling represents a significant milestone in the execution of our US specialty business strategy, ‘’Dr Reddy’s Laboratories Chief Executive Officer G V Prasad said in a statement. The specialty business would be a vital link in the company’s transition from a diversified generic pharmaceutical company to a discovery-led global pharmaceutical company. Dr Reddy’s had filed a New Drug Application (NDA) for Amlodipine Maleate under Section 505 (b) (2) of the Federal Food, Drug and Cosmetic Act in December, 2001. The company had filed a Paragraph IV Certification on the two Orange Book patents listed for Pfizer’s Norvasc — the ‘909 and ‘303 patents, it added. On June 17, 2002, Pfizer notified Dr Reddy’s that it had filed a suit in the US Federal Court on one of the two Orange Book patents, the ‘909 patent. Pfizer did not file a suit on the second patent. Subsequently, Dr Reddy’s filed a motion to dismiss Pfizer’s complaint, the argument for which was heard on December 11, it stated. In October 2002, the US Food and Drug Administration determined the NDA submitted by the Company for Amlodipine Maleate as ‘’Approvable’’. The final approval of the NDA is contingent upon the successful completion of ongoing discussions with the FDA regarding issues relating to specific chemistry manufacturing controls and product labelling. The final approval is also contingent upon a successful outcome in the patent term extension litigation with Pfizer, it said. Amlodipine Besylate is the generic version of Pfizer’s Norvsac and is indicated for the treatment of hypertension and angina.
UNI
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UTI FIASCO
New Delhi, December 18 Short of pin pointing Sinha as the main person responsible for the freeze on UTI’s flagship scheme US-64 in June 2001, a voluminous report of the committee, to be tabled in Parliament tomorrow, is expected to give a detailed account of the then Finance Minister’s “failure” to take timely action, sources said. JPC, which has already zeroed in on the ‘Big Bull’ Ketan Parikh for the payorder scam in Cooperative Bank and the stock scam in March 2001 in its draft report, is likely to name him as the key player in the multi-crore stock scam. The report has also upbraided the Department of Company Affairs for not being able to come out with details of the corporate companies involved in the scam thereby allowing them to go unchecked. The JPC, which was set up last year, was given three extensions as its scope was enlarged to include probe into UTI fiasco besides the securities scam. Taking serious note of not fully implementing the recommendations of the previous JPC report that went into the 1992 stock scam, the report is likely to suggest that government come out with a six monthly progress report on the implementation of this recommendations.
PTI
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Cut interest rate for SSI: RBI Chandigarh, December 18 Speaking at the 82nd meeting of the State Level Bankers Committee, Punjab, he lamented that despite RBI’s instructions not to demand any collateral from the SSI sector, for a loan up to Rs 5 lakh limit, the banks were flouting the instructions at the field level. A recent study conducted by the RBI in Punjab and Chandigarh region, he said, had revealed that there was a need to further delegate the sanctioning powers to branch managers. Mr T.R. Sarangal, Director, Industries, Punjab, said, unlike the credit offtake trends at the national level, the credit to the priority sector along with the SSI sector had decreased in the state this year. While the Credit-Deposit ratio at the national level, he said, had improved by 3 per cent, it has increased by just 1 per cent in the state. Commenting upon the performance of the banks in the state, Mr S.S. Kohli, Chairman and Managing Director, Punjab National Bank, said the aggregate deposits of the banks in Punjab had increased to Rs 51,696 crore by September 2002, from Rs 46,049 crore in September 2001, registering a growth of 12.3 per cent against 11 per cent during the same period last year. The gross credit in the state had also registered a growth of 14.9 per cent during the same period, he said. Mr U.S. Bhargava, General Manager, PNB and convenor SLBC (Pb) claimed that the implementation of government sponsored programmes and schemes in Punjab was on top priority of all concerned banks and they were determined to achieve the targets and bring rapid transformation in socio- economic status of the people of the state. He said in the context of depleting land holdings, the corporate contract farming could yield more income to farmers.
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Sales tax on MRP to affect industry Does the recently introduced sales tax policy of the state government of levying tax on maximum retail price (MRP) constitute a valid piece of legislation in terms of entry 54 of list II contained in Schedule Seventh to the Constitution of India? How an assessee under the sales tax laws can validly be called upon to pay sales tax on a “national amount” that really does not represent his “sale price” in relation to the goods sold by him? How could the Excise and Taxation Commissioner, Haryana, notify the list of 60 items purportedly covered by new MRP-based tax policy much before the legislation introducing section 6A to the Haryana General Sales Tax Act, 1973, was brought about? Is the new law not repugnant to the basic legislative policy underlying sections 6, 15 ad 18 of the Act, 1973? These precisely appear to be some of the significant questions that form part of the subject matter of discussion amongst the trade, industry and tax experts. It was on October 31, 2002, that the Excise and Taxation Commissioner, Haryana, notified that the state had introduced, inter alia from November 1, 2002, new system of levying sales tax on MRP on items. A list in this context came to be uploaded on the official website. Interestingly, this whole exercise was undertaken much before the legislation introducing the substantive provisions having being lawfully enacted. Admittedly no provisions ever existed on the statute book permitting the state government to provide for MRP based levy of tax. It is not understandable as to how the executive could declare through public notices that law with respect to the levy of sales tax stands changed from a given date before the legislation called. “The Haryana General Sales Tax (Amendment) Bill 2002” introduced in the State Assembly being assented to by the Governor of Haryana? Till the writing of this piece, the publication of the new law relating to MRP based in the official gazette was still awaited. Another equally important aspect of the matter is does the state really enjoin the legislative powers under the Constitution to provide for MRP-based levy of tax? Under the existing constitutional provisions, the state is competent barely to make a law for imposition of tax on the “sale or purchase of goods” which means the consideration actually charged or chargeable in respect of a given transaction liable to tax. The state obviously has no powers while providing for imposition of tax to go beyond the “price of goods” that actually comes to be realised against transfer presently in good. In other words the state is not entitled to base the levy of tax on a price that is not attributable to the parties involved a transaction sought to be taxed. The introduction of new law, therefore, not only travels beyond the basic concept of levying tax on sale or purchase of goods but it is also bound to directly impinge upon the free flow of trade and commerce thereby constituting trade barriers. What is more interesting is the object and reasons appended to the Bill that reads. “The levy of sales tax in Haryana is a single point tax. Most of goods are taxed at the stage of first sale or purchase. This means, the value added in these goods as they pass on from the hands of the first seller importer or manufactured to distributor, wholesaler and retailer is not netted in the tax base. To bring this value addition in the tax net, it is proposed to tax goods liable to tax at the stage of first sale at their MRP.” When the state chooses in its wisdom to continue itself in levying tax at the first point, how could it reasonably expect of getting revenue on the subsequent points involving sales? Does it not really amount to taxing a series of transactions at the hands of one person? MRP-based tax indisputably implies levying tax at last point of sale in the state which means sale by a retailer. Then how this levy could be legally be fastened upon a manufacturer or a wholesaler or a distributor who usually happen to be the “first sellers”? This question remains unanswered because of silence in this the context of this issue on the part of the senior government functionaries.
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Punjab to emerge as hub for ITES Chandigarh, December 18 Talking to TNS, he said that efforts are being made to upgrade the curriculum and teaching facilities at the Punjab Technical University (PTU), Jalandhar and its affiliated colleges. Referring to a recent report of the Nasscom- Mckinsey, he said, the ITES industry witnessed a 70 per cent growth in 2001-02 to record revenues of Rs 7,100 crore, which was expected to grow to over Rs100,000 crore industry and generate over 1.1 million jobs by 2008. In collaboration with Chandigarh administration, the department is focusing on developing Chandigarh region, along with Mohali as a major destination for the big IT companies. Some of the leading foreign companies were already in the process of investing in a big way. Talking on the sidelines of the launch of the Planetwordz courses by the NIIT, he said that it would not be surprising, if the Chandigarh and Mohali emerge as a major destination for call centres, only second to Gurgaon in the next few years. Mr Y.S. Rajan, vice chancellor, PTU, felt that the scope of ITES was tremendous keeping in view its applications in the agriculture, medical and judicial sector. Mr Rajinder S. Pawar disclosed that the NIIT is investing Rs 50 crore to provide training in the ITES sector. Training would be provided at more than 80 centres in the Chandigarh region.
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India may rethink strategy
New Delhi, December 18 The Telecom Equipment Manufacturers Association said the arrests of Mr Jain and Polaris senior Vice-President Rajiv Malhotra in Jakarta were “highly deplorable,” and unless an amicable resolution to the problem was found right away, “Indian businessmen would be forced to rethink their business strategy in that part of the world.” The government, on its part, reacted angrily with IT and Telecom Minister Pramod Mahajan pledging his full support to the Indian businessman. Mr Mahajan had said that Prime Minister Atal Behari Vajpayee would speak to President Megawati Sukarnoputri if Mr Jain is not released shortly. The arrests were made after the bank filed a complaint over “a business dispute of $1.3 m.”
UNI
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Sensex looks up Mumbai, December 18 Domestic pharma majors stole the show at the BSE even as ITC, SBI and HCL Tech played a major role in reversing the trend at the BSE, dealers said. According to analysts, select pivotals rallied on the back of positive factors including the US district court’s ruling in favour of Dr Reddy’s Lab, the Finance Ministry’s decision to permit foreign institutional investors (FIIs) to increase their stake in SBI and major reorganisation announcement by Hcl Technologies Ltd. |
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HCL Info unit, HCL Tech to be merged
New Delhi, December 18 The consideration of the transaction will be settled through the issuance of 7.09 million equity shares of HCL Tech to shareholders of HCL Infosystems (HCLI) based on an independent valuation exercise carried out by PriceWaterhouse-Coopers and Bansi Mehta and Company, a company release said here. The merger, which is subject to receipt of all regulatory approvals, will help HCL Tech consolidate its practices in the area of end-user applications and further widen its suite of offerings in the fast-growing enterprise solutions space. Softex had reported revenue of Rs 170 crore and a net income of Rs 17.7 crore for its financial year ended June 30, 2002, with a resource base aggregating 883 employees including 776 technical professionals and development centres in Chennai, Kolkata and Noida.
PTI
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i-flex opens centre in Singapore
Bangalore, December 18 The centre with state-of-the-art infrastructure, located at the International Business Park, has the capacity to house 100 software developers, according to a release here. i-flex already has a strong customer presence in the Asia-Pacific region. Leading financial institutions using i-flex’s products and services include DBS Singapore, UBS Warburg, Affin Bank in Malaysia, CitiBank across the Asia-Pacific, Rabobank Shanghai and Toronto Dominion Bank in Hong Kong.
UNI
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Software exports from Gurgaon to touch 4200 cr Chandigarh, December 18 While stating this here today, a spokesman of the Information Technology Department said that Gurgaon had been ranked third among the country’s major software export locations, thus establishing a lead over Noida, Hyderabad and Delhi.
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Tax collections up 15%
New Delhi, December 18 Indirect Taxes was up by 15.68 per cent at Rs 80,450 crore during April-November while Direct Taxes grew by 13.7 per cent to Rs 36,226 crore, Finance Ministry officials told PTI here today. Industrial recovery pushed up Excise collection by 18.28 per cent to Rs 50,874 crore during the first
eight months as compared to Rs 43,010 crore collected in the year-ago period.
PTI
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