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Singhal, Shiv
- Taxation Policy: A Much-Needed Push for Intellectual Property Creation in India
Abstract Views :83 |
Authors
Affiliations
1 University School of Law and Legal Studies, GGSIP University, Delhi-110 078,, IN
2 High Court of Delhi, Delhi-110 003,, IN
3 J Sagar Associates, Gurgram-122009, Haryana,, IN
1 University School of Law and Legal Studies, GGSIP University, Delhi-110 078,, IN
2 High Court of Delhi, Delhi-110 003,, IN
3 J Sagar Associates, Gurgram-122009, Haryana,, IN
Source
Journal of Intellectual Property Rights, Vol 27, No 2 (2022), Pagination: 146-153Abstract
Tax is one of the sources of funds for the State to be able to provide public goods. Tax policy has also been strategically exploited by the State to achieve desired social interventions and developments. In the modern era, such social development is driven in large part by the growth of intellectual property. Each State strives to achieve an edge over other states through intellectual property. India is no exception and is striving to incentivize the creation of IP via the tax system. In this paper, the authors establish how both tax policy and a robust intellectual property regime have led to the development of the country. The authors have carried out a brief comparative analysis of the tools used by Singapore in their taxation policy which have resulted in the growth of intellectual property. The paper briefly analyses the various tools used by India in its taxation policy for the promotion of intellectual property and their likely impact on India’s aspiration to become self-reliant and globally competitive in the sphere of intellectual property.Full Text
- Ownership and Transfer of ‘Musical Work’ and ‘Sound Recording’– A Case for Service Tax
Abstract Views :119 |
Authors
Affiliations
1 Saikrishna & Associates, Jor Bagh, Delhi – 110 003,, IN
2 Jyoti Sagar Associates, Gurgram, Haryana – 122 009,, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi – 110 078,, IN
1 Saikrishna & Associates, Jor Bagh, Delhi – 110 003,, IN
2 Jyoti Sagar Associates, Gurgram, Haryana – 122 009,, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi – 110 078,, IN
Source
Journal of Intellectual Property Rights, Vol 27, No 3 (2022), Pagination: 227-235Abstract
In the music industry, lyricists and composers enter into contracts with the cinematograph film producers for the incorporation of their work into cinematograph films. However, the ownership of such copyrighted works is dependent on the nature of the contract entered into between the parties and may lead to implications under the service tax regime. The Madras High Court is currently deciding the veracity of the order passed by the Commissioner of Goods & Services Tax and Central Excise, holding A.R. Rahman liable for paying service tax on the alleged services rendered by him. This paper analyses the nature of contracts that individuals like A.R. Rahman might enter into with the producers of the cinematograph film producers from the lens of the Indian Copyright Act, 1957 and thereafter discusses the possible implications of such contracts from the prism of the service tax regime.Full Text
- Commercializing Copyright – A Taxing Event for the Copyright Owner?
Abstract Views :85 |
PDF Views:77
Authors
Affiliations
1 J Sagar Associates, Gurugram — 122 009, Haryana,, IN
2 Saikrishna & Associates, Delhi — 110 003,, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi — 110 078,, IN
1 J Sagar Associates, Gurugram — 122 009, Haryana,, IN
2 Saikrishna & Associates, Delhi — 110 003,, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi — 110 078,, IN
Source
Journal of Intellectual Property Rights, Vol 27, No 4 (2022), Pagination: 290-300Abstract
With the ever-growing avenues to exploit copyrightable works, the copyright holders strive to exploit their copyright and copyrightable works through various modes to maximize the economic returns on their copyright and copyrightable works. Different methods of commercial exploitation of the copyright lead to taxable events both under direct taxes and indirect taxes. This paper attempts to broadly discuss the provisions relating to the taxation of income generated out of the exploitation of the economic rights of copyright holders/owners, including aspects of international taxation and GST, with the help of recent decisions. This paper, through its analysis, helps the readers to appreciate the balance achieved by the legislators in promoting the creation of intellectual works and revenue generation.Keywords
Copyright, Economic Rights, Commercial Exploitation, Taxation, Royalty, Income, Income Tax, GST, Service Tax.Full Text
References
- Section 2(o) of the Copyright Act, 1957.
- Section 2(h) of the Copyright Act, 1957.
- Section 2(p) of the Copyright Act, 1957.
- Section 2(c) of the Copyright Act, 1957.
- Section 2(f) of the Copyright Act, 1957.
- Section 2(xx) of the Copyright Act, 1957.
- Clause (a) read with clause (c) of the proviso to Section 17 of the Copyright Act, 1957.
- Section 2(d) of the Copyright Act, 1957.
- Clause (b) of the proviso to Section 17 of the Copyright Act, 1957.
- Second proviso to Section 17 of the Copyright Act, 1957.
- Section 18 of the Copyright Act, 1957.
- Section 19 of the Copyright Act, 1957.
- Section 30 of the Copyright Act, 1957.
- Section 2(qq) of the Copyright Act, 1957.
- Section 2(q) of the Copyright Act, 1957.
- Section 37 the Copyright Act, 1957.
- Sections 38 and 38A of the Copyright Act, 1957.
- Section 39A of the Copyright Act, 1957.
- Section 2(24) of the IT Act, 1961.
- Section 4 of the IT Act, 1961.
- Section 2(31) of the IT Act, 1961.
- Section 5 of the IT Act, 1961.
- Section 6 of the IT Act, 1961.For instance: A company is a resident in India under the IT Act in a FY when either (a) it is an ‘Indian company’; or (b) its ‘place of effective management’ The phrase ‘place of effective management” means ’a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made’.
- Section 5(1) of the IT Act, 1961.
- Section 5(2) of the IT Act, 1961.
- Section 2(45) of the IT Act, 1961.
- CIT v Bhagwan Broker Agency [1995] 212 ITR 133 (Rajasthan).
- CIT v Manmohan Das [1966] 59 ITR 699 (SC).
- Section 2(13) of the IT Act, 1961.
- Karnani Properties Ltd v CIT, [1971] 82 ITR 547 (SC) followed in CIT v M.P. Bazaz, [1993] 200 ITR 131.
- Lala Indra Sen, In re, (1940) 8 ITR 187 (All)
- Narain Swadeshi Weaving Mills v CEPT, (1954) 26 ITR 765 (SC).
- Section 37(1) of the IT Act, 1961.
- Section 43(6)(c) of the IT Act, 1961.
- Section 2(11) of the IT Act, 1961.It means a group of assets falling within a class of assets comprising either (a) tangible assets, or (b) intangible assets, being know-how, patents, copyrights, trademarks, licenses, franchises or any other business or commercial rights of similar nature, not being goodwill of a business or profession, in respect of which the same percentage of depreciation is prescribed.
- Section 32(1)(ii) of the IT Act read with Rule 5(1) of the Income Tax Rules, 1962 (“IT Rules”) and Part B of Appendix I of IT Rules.
- Section 56(1) of the IT Act, 1961.
- Section 57(iii) of the IT Act, 1961.
- Section 194J(1) of the IT Act, 1961.
- Explanation 2 to Section 9(1)(vi) of the IT Act, 1961.
- Section 80B(5) of the IT Act, 1961.It means ‘the total income computed in accordance with the provisions of this Act, before making any deduction’ under Chapter VIA of the IT Act, 1961.
- Section 80A(1) of the IT Act, 1961.
- As per Explanation (d) to Section 80QQB of the IT Act, lump sum, “in regard to royalties or copyright fees, includes an advance payment on account of such royalties or copyright fees which is not returnable”.
- First proviso to Section 80QQB(2) of the IT Act, 1961.
- Explanation (b) to Section 80QQB of the IT Act. 1961 – ‘brochures, commentaries, diaries, guides, journals, magazines, newspapers, pamphlets, text-books for schools, tracts and other publications of similar nature, by whatever name called’
- Section 115A(1)(b) of the IT Act, 1961.
- Plus applicable surcharge and cess
- As per Explanation (c) to Section 44DA of the IT Act, the term ‘permanent establishment’ is defined to include “a fixed place of business through which the business of the enterprise is wholly or partly carried on”.
- Section 44DA of the IT Act, 1961.
- Section 90(2) of the IT Act, 1961.
- Section 48(1) of the IT Act, 1961.
- Section 2(14) of the IT Act, 1961.
- As per H. Mohmed & Co. v CIT [1977] 107 ITR 637 (Gujarat), a’ stock-in-trade’ is “something in which a trader or a businessman deals; whereas his capital asset is something with which he deals. It is possible that one and the same commodity may in the case of one assessee be his stock-in-trade, whereas in the case of another assessee it may be his capital asset.For example, in the case of an assessee who carries on the business of buying and selling land, land may be his stock-in-trade but in the case of an assessee who has invested his savings in land and gets income from the land or the structures put up on the land, the land is his capital asset. Therefore, one of the indications for deciding as to what is stock in-trade is whether a particular assessee is buying or selling the commodity or whether he has merely invested his amount with a view to earn further income or with a view to carry on his other business. It may be pointed out that ‘trade’ means that particular business activity where the person engaged in the profession buys or sells. All businesses may be carried on for the purpose of earning a profit but that particular kind of business where the businessman buys and sells a commodity can only be designated as ‘trade’.” [Emphasis supplied]
- Section 2(47) of the IT Act, 1961.
- Section 2(42A) of the IT Act, 1961.
- Second proviso to Section 48 of the IT Act, 1961.
- Index notified by the Central Government in the Official Gazette (having regard to 75% of average rise in the Consumer Price Index (urban)) as per Clauses (v) of the Explanation to Section 48 of the IT Act, 1961.
- Clauses (iii) of the Explanation to Section 48 of the IT Act, 1961.
- Clauses (iv) of the Explanation to Section 48 of the IT Act, 1961.
- Plus applicable surcharge and cess. Section 112(1) of the IT Act, 1961.
- [1987] 168 ITR 733 (Bombay).
- Section 50 of the IT Act, 1961.
- Explanation 2 to Section 9(1)(vi) of the IT Act, 1961.
- ‘GST laws collectively refers CGST Act and Integrated Goods and Services Tax Act, 2017 (“IGST Act”).
- Section 9(1) of the CGST Act and Section 5(1) of the IGST Act, 2017
- Section 7(1) of the CGST Act, 2017
- Section 2(52) of the CGST Act, 2017
- Section 2(102) of the CGST Act, 2017
- Schedule II to the CGST Act, 2017
- Entry 5(c) of Schedule II to the CGST Act, 2017
- Serial No. 452P of Notification No. 1/2017 Central Tax (Rate), dated 28-6-2017 read with Notification No. 13/2021 Central Tax (Rate), dated 27-10-2021.
- Serial No. 17 item (ii) of Notification No. 11/2017 Central Tax (Rate) dated 28-6-2017 read with Notification No. 6/2021 Central Tax (Rate), dated 30-9-2021.
- USV (P.) Ltd., In re, [2021] 133 taxmann.com 296 (AAR - MAHARASHTRA), the question of classification of transfer of registered trademarks as either supply of goods or supply of services under GST law was raised. However, based on the certain procedural the application for advance ruling was rejected as being not maintainable under section 95 of CGST Act.
- Notification No. 25/2012-ST, dated 20-6-2012 as amended by Notification No. 3/2013-ST, dated 1 March 2013.The relevant extract is “15. Services provided by way of temporary transfer or permitting the use or enjoyment of a copyright – (a) covered under clause (a) of sub-section (1) of Section 13 of the Copyright Act, 1957 (14 of 1957), relating to original literary, dramatic, musical or artistic works; or (b) of cinematograph films for exhibition in a cinema hall or cinema theatre;”
- Explanation 3 to Section 9(1)(vi) of the IT Act, 1961.
- Section 2(ffc) of the Copyright Act.
- Explanation 2 to Section 9(1)(vi) of the IT Act, 1961.
- Explanation 4 to Section 9(1)(vi) of the IT Act, 1961.
- Section 90(2) of the IT Act, 1961.
- (2022) 3 SCC 321.
- The extract of the relevant paragraphs is “180. Given the definition of “royalties” contained in Article 12 of the DTAAs mentioned in Para 46 of this judgment, it is clear that there is no obligation on the persons mentioned in Section 195 of the Income Tax Act to deduct tax at source, as the distribution agreements/EULAs in the facts of these cases do not create any interest or right in such distributors/end-users, which would amount to the use of or right to use any copyright. The provisions contained in the Income Tax Act [Section 9(1)(vi), along with Explanations 2 and 4 thereof], which deal with royalty, not being more beneficial to the assessees, have no application in the facts of these cases.181.Our answer to the question posed before us, is that the amounts paid by resident Indian end-users/distributors to non-resident computer software manufacturers/suppliers, as consideration for the resale/use of the computer software through EULAs/distribution agreements, is not the payment of royalty for the use of copyright in the computer software, and that the same does not give rise to any income taxable in India, as a result of which the persons referred to in Section 195 of the Income Tax Act were not liable to deduct any TDS under Section 195 of the Income Tax Act. The answer to this question will apply to all four categories of cases enumerated by us in Para 3 of this judgment.”
- Commissioner of Income Tax International Taxation & Anr v Engineering Analysis Centre of Excellence Pvt Ltd, RP(C) 1422/2021.
- Rajgopalan Ganesh CA, Taxation of Copyright Royalties in India: Interplay of Copyright Law and Income Tax, Oak Bridge Publishing Pvt Ltd, Gurugram (2019).
- In re [2009] 182 Taxman 268 (AAR)
- In re [2005] 142 Taxman 284 (AAR) (thereafter affirmed by Hon’ble Bombay High Court)
- ITA No. 1683/Mum./2015
- Income Tax Officer (International Taxation)-I, Ahmedabad v Cadila Healthcare Ltd. [2017] 77 taxmann.com 309/162 ITD 575 (Ahmedabad - Trib.); Deputy Commissioner of Incometax (International Taxation) Ahmedabad v Welspun Corporation Ltd. [2017] 77 taxmann.com 165 (Ahmedabad - Trib.)
- ESPN Star Sports v Global Broadcast News Ltd. 2008 (38) PTC 477 (Delhi); Akuate Internet Services (P) Ltd v Star India (P) Ltd. [FAO (OS) 153/2013], CIT v Delhi Race Club (1940) Ltd [2015] 228 Taxman 185 (Delhi HC)
- Fox Network Group Singapore (P.) Ltd. v ACIT [2020] 121 taxmann.com 330 (Delhi ITAT); CIT v Delhi Race Club (1940) Ltd [2015] 228 Taxman 185 (Delhi HC); DDIT v Nimbus Communications Ltd [2013] 32 taxmann.com 53 (Mumbai ITAT); and ADIT v Neo Sports Broadcast (P.) Ltd. [2011] 15 taxmann.com 175 (Mumbai ITAT)
- Agrawal A, Singhal S & Sakthivel M, Ownership and transfer of ‘Musical Work’ and ‘Sound Recording’– A case for Service Tax, Journal of Intellectual Property Rights, 27 (3) (2022) 227.
- Taxing the Trade of the Trade Mark
Abstract Views :123 |
PDF Views:84
Authors
Affiliations
1 J Sagar Associates, Gurugram — 122 009, Haryana,, IN
2 Saikrishna & Associates, Delhi — 110 003,, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi — 110 078,, IN
1 J Sagar Associates, Gurugram — 122 009, Haryana,, IN
2 Saikrishna & Associates, Delhi — 110 003,, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi — 110 078,, IN
Source
Journal of Intellectual Property Rights, Vol 27, No 5 (2022), Pagination: 367-378Abstract
Trade marks generate recognition to businesses by providing and protecting their distinctive features, among others, in a competitive market. Trade marks, being intangible property, can be transferred to third parties by various modes like assignment/ transmission/license. Since, trade marks have the potential to be commercially exploited and thereby attract tax (direct and/or indirect) on its commercial exploitation. This paper highlights the various modes through which trade marks can be commercialised and the implication under both direct and indirect taxation of such commercialisation. The paper also discusses recent issues with respect to the taxation of the income generated from the transfer of trade marks.Keywords
Trade mark, Economic Rights, Commercial Exploitation, Taxation, Royalty, Income Tax, GST.Full Text
References
- Meghraj Biscuits Industries Ltd v CCE, (2007) 3 SCC 780.
- Ramdev Food Products Pvt Ltd v Arvind bhai Rambhai Patel & Ors, (2006) 8 SCC 726.
- Section 2(m) of the TM Act.
- Taj Mahal Palace Hotel and the BSE Building.
- Mary Cohr Store Layour.
- Yahoo’s yodel.
- Section 2(1)(e) of the TM Act.
- Section 2(1)(g) of the TM Act.
- Section 2(1)(zg) of the TM Act.
- CS(COMM) 133/2022, dated 26 July 2022.
- Section 2(1)(zc) of the TM Act.
- (2008) 36 PTC 131 (IPAB).
- BDA Ltd v State of Uttar Pradesh, (1996) IPLR 93.
- Section 37 of the TM Act.
- Section 39 of the TM Act.
- (1859) 28 LJ Ch 841.
- (1970) 1 SCC 248.
- (1981) 2 SCC 460.
- (2002) 3 SCC 65.
- Section 42 of the TM Act.
- Section 43 of the TM Act.
- Section 44 of the TM Act.
- Section 40 of the TM Act.
- Section 41 of the TM Act.
- Singhal S, Agrawal A & Sakthivel M, Commercializing Copyright–A Taxing Event for the Copyright Owner? Journal of Intellectual Property Rights, 27(4) (2022) 290.
- Section 2(24) of the IT Act.
- Section 4 of the IT Act.
- Section 2(31) of the IT Act.
- Section 5 of the IT Act.
- Section 6 of the IT Act. For instance: A company is a resident in India under the IT Act in a FY when either (a) it is an ‘Indian company’; or (b) its ‘place of effective management’. The phrase ‘place of effective management" means ‘a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made’.
- Section 5(1) of the IT Act.
- Section 5(2) of the IT Act.
- Section 2(45) of the IT Act.
- CIT vBhagwan Broker Agency [1995] 212 ITR 133 (Rajasthan).
- CIT v Manmohan Das [1966] 59 ITR 699 (SC).
- Section 2(13) of the IT Act.
- Section 37(1) of the IT Act.
- Section 43(6)(c) of the IT Act.
- Section 2(11) of the IT Act. It means a group of assets falling within a class of assets comprising either (a) tangible assets, or (b) intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, not being goodwill of a business or profession, in respect of which the same percentage of depreciation is prescribed.
- Section 32(1)(ii) of the IT Act read with Rule 5(1) of the Income Tax Rules, 1962 (“IT Rules”) and Part B of Appendix I of IT Rules.
- Section 56(1) of the IT Act.
- Section 57(iii) of the IT Act.
- Section 194J(1) of the IT Act.
- Explanation 2 to Section 9(1)(vi) of the IT Act.
- Section 115A(1)(b) of the IT Act.
- Plus applicable surcharge and cess
- As per Explanation (c) to Section 44DA of the IT Act, the term ‘permanent establishment’ is defined to include “a fixed place of business through which the business of the enterprise is wholly or partly carried on”.
- Section 44DA of the IT Act.
- Section 90(2) of the IT Act.
- Section 48(1) of the IT Act.
- Section 2(14) of the IT Act.
- As per H. Mohmed & Co. v. CIT [1977] 107 ITR 637 (Gujarat), a ’stock-in-trade’ is “something in which a trader or a businessman deals; whereas his capital asset is something with which he deals. It is possible that one and the same commodity may in the case of one assessee be his stock-in-trade, whereas in the case of another assessee it may be his capital asset. For example, in the case of an assessee who carries on the business of buying and selling land, land may be his stock-in-trade but in the case of an assessee who has invested his savings in land and gets income from the land or the structures put up on the land, the land is his capital asset. Therefore, one of the indications for deciding as to what is stock in-trade is whether a particular assessee is buying or selling the commodity or whether he has merely invested his amount with a view to earn further income or with a view to carry on his other business. It may be pointed out that ‘trade’ means that particular business activity where the person engaged in the profession buys or sells. All businesses may be carried on for the purpose of earning a profit but that particular kind of business where the businessman buys and sells a commodity can only be designated as ‘trade'.” [Emphasis supplied]
- Section 2(42A) of the IT Act.
- [2011] 11 taxmann.com 374 (Delhi).
- Second proviso to Section 48 of the IT Act.
- Plus applicable surcharge and cess. Section 112(1) of the IT Act.
- [1987] 168 ITR 733 (Bombay).
- Section 55(2)(a) of the IT Act.
- Section 50 of the IT Act.
- Explanation 2 to Section 9(1)(vi) of the IT Act.
- ‘GST laws collectively refers CGST Act and Integrated Goods and Services Tax Act, 2017 (“IGST Act”).
- Section 9(1) of the CGST Act and Section 5(1) of the IGST Act.
- Section 7(1) of the CGST Act.
- Section 2(52) of the CGST Act.
- Section 2(102) of the CGST Act.
- Schedule II to the CGST Act.
- Entry 5(c) of Schedule II to the CGST Act.
- Serial No. 452P of Notification No. 1/2017 Central Tax (Rate), dated 28-6-2017 read with Notification No. 13/2021 Central Tax (Rate), dated 27-10-2021.
- Serial No. 17 item (ii) of Notification No. 11/2017 Central Tax (Rate) dated 28-6-2017 read with Notification No. 6/2021 Central Tax (Rate), dated 30-9-2021.
- USV (P.) Ltd., In re, [2021] 133 taxmann.com 296 (AAR - MAHARASHTRA), the question of classification of transfer of registered trademarks as either supply of goods or supply of services under GST law was raised. However, based on the certain procedural the application for advance ruling was rejected as being not maintainable under section 95 of CGST Act.
- Union of India v CUB Pty Ltd. (SLP(C) No. 19060/ 2017).
- [2016] 71 taxmann.com 315 (Delhi)
- CIT v Sony Mobile Communications India Pvt. Ltd. (SLP(C) No. 12971/2020) against the decision of Hon’ble Delhi High Court decided on 16th March 2015. CIT v Maruti Suzuki India Ltd. (SLC (C) No. 22181/2016) against the decision of Hon’ble Delhi High Court decided on 11th December 2015.
- Chapter X of the IT Act.
- Raffaele Petruzzi, GiammarcoCottani and Michael Lang, Fundamentals of Transfer Pricing: Industries, Regions, New Technologies, and Other Topics, Chapter 25 (Kluwer Law International BV 2022).
- OECD (2022), OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations 2022, OECD Publishing, Paris, https://doi.org/10.1787/0e655865-en.
- Section 92 of the IT Act.
- Section 92B(1) of the IT Act.
- Section 92A(1) of the IT Act.
- Section 92A(2) of the IT Act.
- Some of the instances of such deeming fiction are: a. one enterprise holds, directly or indirectly, shares carrying not less than 26% of the voting power in the other enterprise; or b. any person or enterprise holds, directly or indirectly, shares carrying not less than 26% of the voting power in each of such enterprises; or c. more than half of the board of directors or members of the governing board, or one or more executive directors or executive members of the governing board of one enterprise, are appointed by the other enterprise; or d. more than half of the directors or members of the governing board, or one or more of the executive directors or members of the governing board, of each of the two enterprises are appointed by the same person or persons; or e. the manufacture or processing of goods or articles or business carried out by one enterprise is wholly dependent on the use of know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, or any data, documentation, drawing or specification relating to any patent, invention, model, design, secret formula or process, of which the other enterprise is the owner or in respect of which the other enterprise has exclusive rights.
- United States Court of Appeals, Ninth Circuit decided on April 11, 2002 (Nos. 99-71580, 00-70008, 99-71592 and 99- 71675).
- 2013 SCC OnLine ITAT 483.
- Maruti Suzuki India Ltd. v CIT, [2015] 64 taxmann.com 150 (Delhi).
- Para 6.34 to the OECD Transfer Pricing Guidelines.
- Para 6.71 to the OECD Transfer Pricing Guidelines.
- ITA No. 7194/Mum/2017 decided on 23rd August 2019.
- Karol Dziwinski, The DEMPE Concept and Intangibles: Definition, Practical Approach and Analysis in the Context of Licence Model (Chapter 3, Section 3.3.4) (Kluwer Law International BV 2022).
- [2014] 52 taxmann.com 215 (Delhi).
- Need for Invention in the Taxation Regime of Patents
Abstract Views :85 |
PDF Views:83
Authors
Affiliations
1 Saikrishna & Associates, Delhi – 110 003,, IN
2 J Sagar Associates, Gurugram — 122 009, Haryana, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi — 110 078, IN
1 Saikrishna & Associates, Delhi – 110 003,, IN
2 J Sagar Associates, Gurugram — 122 009, Haryana, IN
3 University School of Law and Legal Studies, GGSIP University, Dwarka, Delhi — 110 078, IN
Source
Journal of Intellectual Property Rights, Vol 27, No 6 (2022), Pagination: 442-450Abstract
The patent system was introduced with the motto of ensuring furtherance of science and technology for the benefit of society. When compared with other Intellectual Property (IP), patent has a different dimension that is of technology transfer, and the same has been playing a vital role in domestic and international trade and commerce. Every event of commercialising patent attracts economic returns to the patentee as well as the country where it is registered, retained and commercialised. Thus, merely having inventor friendly ecosystem without foreseeing to retain the registered patents in India for commercialisation to the fullest extent will not favour the developmental goals of the nation. In this context, the paper examines the Indian Taxation regime for the taxing events of patents, both under direct and indirect taxes, and their conduciveness for the effective promotion of creation, retention and commercialisation of patents in India. This paper also compares the taxation of patents in other jurisdictions with India and recommends a favourable tax regime for patents which would incentivise innovation and consequent commercialisation leading to the advancement of the nationKeywords
Patent, Economic Rights, Commercial Exploitation, Taxation, Royalty, Income, Income Tax, GST, Patent Box.Full Text
References
- Patents (Amendment) Act, 2005 through which Section 5 was omitted.
- Section 83 of the Patents Act.
- Section 2(j) of the Patents Act.
- Section 7 of the Patents Act.
- Section 53 of the Patents Act.
- Section 48 of the Patents Act.
- Patent rights are territorial in nature.
- Patents Act mandates to go for registration for protection unlike in copyright and trademark.
- Section 70 of the Patents Act.
- Section 69 of the Patents Act.
- Section 20 and Section 7(2) of the Patents Act.
- Section 2(1)(f) of the Patents Act.
- Insitu form Technical Services v Inliner UK Plc (1992) RPC 83, p 105.
- Section 140 of the Patents Act.
- Singhal S, Agrawal A & Sakthivel M, Commercializing Copyright–A Taxing Event for the Copyright Owner?, Journal of Intellectual Property Rights, 27 (4) (2022) 290.
- Singhal S, Agrawal A & Sakthivel M, Taxing the Trade of the Trade Mark, Journal of Intellectual Property Rights, 27 (5) (2022) 367.
- Section 2(24) of the IT Act.
- Section 4 of the IT Act.
- Section 2(31) of the IT Act.
- Section 5 of the IT Act.
- Section 6 of the IT Act.
- Section 6 of the IT Act. For instance: A company is a resident in India under the IT Act in a FY when either (a) it is an 'Indian company'; or (b) its 'place of effective management'. The phrase' place of effective management" means 'a place where key management and commercial decisions that are necessary for the conduct of business of an entity as a whole are, in substance made'.
- Section 5(1) of the IT Act.
- Section 5(2) of the IT Act.
- Section 2(45) of the IT Act.
- CIT v Manmohan Das [1966] 59 ITR 699 (SC).
- Section 2(13) of the IT Act.
- Section 37(1) of the IT Act.
- Section 43(6)(c) of the IT Act
- Section 2(11) of the IT Act. It means a group of assets falling within a class of assets comprising either (a) tangible assets, or (b) intangible assets, being know-how, patents, copyrights, trademarks, licences, franchises or any other business or commercial rights of similar nature, not being goodwill of a business or profession, in respect of which the same percentage of depreciation is prescribed.
- Section 32(1)(ii) of the IT Act read with Rule 5(1) of the Income Tax Rules, 1962 ("IT Rules") and Part B of Appendix I of IT Rules.
- Section 56(1) of the IT Act.
- Section 57(iii) of the IT Act.
- Section 80B(5) of the IT Act. It means 'the total income computed in accordance with the provisions of this Act, before making any deduction 'under Chapter VIA of the IT Act.
- Section 80A(1) of the IT Act.
- Clause (h) of the Explanation to Section 115BBF of the IT Act and Clause (g) of the Explanation to Section 80RRB of the IT Act.
- As defined in Section 2(1)(q) of the Patents Act.
- As defined in Section 2(1)(q) of the Patents Act.
- Section 9(1)(vi) of the IT Act.
- Section 115A(1)(b) of the IT Act.
- Plus applicable surcharge and cess
- As per Explanation (c) to Section 44DA of the IT Act, the term 'permanent establishment' is defined to include "a fixed place of business through which the business of the enterprise is wholly or partly carried on".
- Section 44DA of the IT Act.
- Section 90(2) of the IT Act.
- Section 48(1) of the IT Act.
- Section 2(14) of the IT Act.
- As per H. Mohmed & Co. v CIT [1977] 107 ITR 637 (Gujarat), a' stock-in-trade' is "something in which a trader or a businessman deals; whereas his capital asset is something with which he deals. It is possible that one and the same commodity may in the case of one assessee be his stock-in-trade, whereas in the case of another assessee it may be his capital asset. For example, in the case of an assessee who carries on the business of buying and selling land, land may be his stock-in-trade but in the case of an assessee who has invested his savings in land and gets income from the land or the structures put up on the land, the land is his capital asset. Therefore, one of the indications for deciding as to what is stock in-trade is whether a particular assessee is buying or selling the commodity or whether he has merely invested his amount with a view to earn further income or with a view to carry on his other business. It may be pointed out that 'trade' means that particular business activity where the person engaged in the profession buys or sells. All businesses may be carried on for the purpose of earning a profit but that particular kind of business where the businessman buys and sells a commodity can only be designated as 'trade'." [Emphasis supplied]
- [1984] 8 ITD 57 (BOM.).
- Section 2(42A) of the IT Act.
- Second proviso to Section 48 of the IT Act.
- Plus applicable surcharge and cess. Section 112(1) of the IT Act.
- [1987] 168 ITR 733 (Bombay).
- Section 55(2)(a) of the IT Act.
- [2017] 78 taxmann.com 188 (Mumbai - Trib.).
- Section 50 of the IT Act.
- Explanation 2 to Section 9(1)(vi) of the IT Act.
- Section 2(52) of the CGST Act.
- Section 2(102) of the CGST Act.
- Section 9(1) of the CGST Act and Section 5(1) of the IGST Act.
- 'GST laws collectively refers CGST Act and Integrated Goods and Services Tax Act, 2017 ("IGST Act").
- Section 7(1) of the CGST Act.
- Schedule II to the CGST Act.
- Entry 5(c) of Schedule II to the CGST Act.
- Serial No. 452P of Notification No. 1/2017 Central Tax (Rate), dated 28-6-2017 read with Notification No. 13/2021 Central Tax (Rate), dated 27-10-2021.
- Serial No. 17 item (ii) of Notification No. 11/2017 Central Tax (Rate) dated 28-6-2017 read with Notification No. 6/2021 Central Tax (Rate), dated 30-9-2021.
- USV (P.) Ltd., In re, [2021] 133 taxmann.com 296 (AAR - MAHARASHTRA), the question of classification of transfer of registered trademarks as either supply of goods or supply of services under GST law was raised. However, based on the certain procedural the application for advance ruling was rejected as being not maintainable under section 95 of CGST Act.
- Comparative analysis by OECD available at https://qdd.oecd.org/data/IP_Regimes
- Griffith R, Miller H & O'Connell M, Ownership of intellectual property and corporate taxation, Journal of Public Economics, 112 (2014) 12, ISSN 0047-2727, https://doi.org/10.1016/j.jpubeco.2014.01.009.
- Alstadsæter A, Barrios S, Nicodeme G, Skonieczna A M & Vezzani A, Patent Boxes Design, Patents location, and local R&D, Economic Policy, 33(93) (2018) 131, https://doi.org/10.1093/epolic/eix021
- Departmental Circular No. 3 of 2017, dated 20th January 2017.