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Product
patent regime comes into force Infrastructure
needs overhaul, says Punjab minister
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Punjab
registers low tax collection
Govt
bends fleet and experience rules for foreign airlines Investor
guidance Banks
should take a cue from POs on TDS issue
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Product patent regime comes into force New Delhi, January 1 The Ordinance of December 26, 2004, paved the way for introduction of product patent protection for inventions in the fields of food, chemicals and pharmaceuticals. “It (the Ordinance) has effective provisions, inter-alia, to ensure the availability of products at reasonable price through compulsory licence; for revocation of patents for non-working in India as well as in public interest; use of invention for the purposes of government; acquisition or invention for patents for public purpose; and provides for parallel import so that the patented product can become available at the lowest international price,” official sources said. Union Minister of Commerce & Industry, Mr Kamal Nath, has said the requirements of the public in regard to the availability and affordability are taken care of and public interest, particularly public health and nutrition fully protected. “The law effectively balances and calibrates intellectual property protection with public health concerns and national security,” he had said. India is a signatory to the agreement 1994 establishing the World Trade Organisation (WTO) and the agreement on trade-related intellectual property rights (Trips) is a part of the WTO agreement, which India had ratified. The Patents Act was required to be amended, once the transition period of 10 years for developing countries expired on December 31, 2004, as per the Trips agreement so as to extend product patent protection for inventions in the fields of food, chemicals and pharmaceuticals. Patent (Third) Amendment also provides for deletion of provisions relating to Exclusive Marketing Rights (which would become redundant) and streamlines the system by having both pre-grant and post-grant opposition to patents. The Ordinance on Patents was the same as the Bill introduced last year but with improvements in some significant respect. A provision for patenting of software that is embedded in hardware has been introduced. Moreover, there is a provision for a definite pre-grant opposition procedure.
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Infrastructure needs overhaul, Chandigarh, January 1 The state’s road network is in bad shape at most of the places. There is immediate need to build railway overbridges at various places. Almost all major cities and towns, which have virtually become unfit for human habitation, need about Rs 6,000 crore to provide dependable sewerage system, potable water and other facilities such as ring roads for better management of vehicular traffic. The revenue earned by towns and cities by way of octroi is in the range of Rs 1,000 crore only. Almost entire of this amount is spent on the maintenance of existing utilities. Mr Surinder Singla, Finance Minister, said there was nothing wrong with the economy of state. He asserted that the state was zooming with activity. “But state’s finances are in a bad shape. And Punjab is not the only state to have such a situation. Almost all states are having the same problem”, he added. “We are going to provide policy leverage to ensure better private investment to improve infrastructure”, said Mr Singla. He said there were roads with heavy traffic density and the private players were ready to make these quality roads. These would be constructed on built, operate and transfer (BOT) basis. However, where traffic density was less and private investors were not keen to invest, the Punjab Infrastructure Development Board (PIDB) would invest and fill the gap, he added. He said the state’s entire revenue was spent on salaries, pensions and in the payment of interest on Central and other loans. Mr Singla said he would start working on the budget from January 8. “I have written to all my Cabinet colleagues to send suggestions regarding their departments.
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Punjab registers low tax collection Ludhiana, January 1 Citing lack of adequate political support for reforms aimed at raising additional revenue and reducing tax evasion, the bank pointed out the need for immediate implementation of reforming the sales tax system. According to statistics, Punjab’s tax to Gross State Domestic Product (GSDP) ratio in 2001-02 was 7 per cent, which was lower than the average for both the high and middle income states and only marginally higher than the average of low income states.
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by A.N. Shanbhag
Banks should take a cue from POs on TDS issue
Q: While many of the ambiguities regarding the eligibility of investment of Rs15 lakh for each of the spouses, if both of them are senior citizens, closure of the account in case of death of one of the spouses and refund of the amount to surviving spouse, non-applicability of section 80L etc have been addressed, the scheme is silent regarding the deductible TDS on the quarterly interest.
I understand that normally there is no TDS in case of post-office savings schemes; but some of the bank branches are saying that TDS will be deducted from the quarterly interest as per the Income Tax Rules, thus driving away the potential investors. I shall be obliged if you would kindly throw some light on this aspect, whether the banks are correct in their stand in this regard. — Ghanshyam Bhuneja A: In the case of 8 per cent taxable RBI Saving Bonds introduced on March 24, 2003, the notification on non-applicability of TDS was issued on January 13, 2004, much after the first lot of 6-monthly interest was distributed without deduction of the TDS. The LIC Varistha Bima Yojana also suffered from the similar lethargy. The rules of the SCSS are silent on this issue. I am sure that the notification will eventually be issued. However, note that the first quarterly interests are issued by the post offices without application of TDS. I hope the banks take a clue from this.
Capital loss and gain
Q: I want a small clarification on the following point. I am in 30 per cent tax bracket. I made short-term capital gain of Rs 1 lakh before September 30, 2004, in shares. I also made short-term capital loss of Rs 80,000 after October 1, 2004. For computing income tax, can I combine these two and say I have to pay 30 per cent tax on 20,000 only. Please, advise how the income tax is to be computed. — Madhav Pendyala A: Prior to the amendments of FA 04, any assesse is required to net out the short-term gains against short-term losses earned during the FY and present the resultant for tax or carry forward. In other words, he is not allowed to pay tax on the gains and carry forward the loss, if it was beneficial for him to do so. The legislation in this respect has not been amended. Therefore, I strongly feel that you should be allowed to go ahead with your proposal. You can setoff the Short Term Capital Loss (STCL) made after October 1, 2004 against the Short Term Capital Gain (STCG) made before October 1, 2004. The case related to long-term gains and losses are identical. But here, the gains earned after October 1, 2004 is exempt and so are the losses. Consequently, these are not treated as income. Therefore none of the following is feasible — a) Setoff the LTCG earned after October 1 with LTCL earned before that date. b) Setoff the LTCL earned before October 1with LTCG earned after that date. c) Setoff the LTCG earned after October 1with LTCL earned after that date and vice-versa. I sincerely hope that I am right.
Dividend stripping
Q: Does the amendments in the recent Budget and remarks of Mr Chidambaram on curbing the practice of dividend stripping create any problems for investors who want to do tax planning by investing in the fund in the given time frame of three months before and nine months after the record date of dividend declaration? Is any limit set for such tax planning? Will the accounts be scrutinised by the tax authorities. The investor is an individual entity. — Raveena A: The modified Section 94 (7) has been made effective from April 1, 2004. This means that the provision will be applicable whenever a person sells shares or units after this date and the following four conditions are simultaneously satisfied — 1. The purchase has been within three months before the record date, 2. The sale has been within three months in the case of shares and nine months in the case of units, after the record date, 3. The dividend is tax-free and 4. The sale results in a loss (naturally, short-term). If all four conditions are satisfied, the loss arising on the sale to the extent it does not exceed the exempt income has to be ignored. If any one of the above conditions is not satisfied, Section 94 (7) does not apply. An individual can plan and use the strategy to save taxes by following the letter of the law. It is the right of any taxpayer to undertake any tax planning and it is also the right of the government to enact legislation to prevent the taxpayers from taking any actions, which are not beneficial to the revenue. Therefore, the government should not take any action retrospectively, but in the case of dividend stripping, it has indulged in such practice.
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