No 3G For iPhone In India!

August 19, 2008

Bharti Airtel and Vodafone, both are bringing the iPhone 3G to India and have started bookings for the phone as well. But what no one is talking about right now is that there is actually no 3G network in India yet. If we look at the promises the telecom department has been making for the past few years, there is no deadline for 3G roll-out in India. There was a dialogue in Matrix movie where Neo, when arrested by agents, asks for a phone call. Agent Smith says, “How good is a phone call, when you can’t speak?” as he had sealed his lips. So, here one can say, “How good is the iPhone 3G when there is no 3G network in the country?” Should consumers fall for that and buy iPhone 3G, which will not be able to offer 3G services despite being a 3G device?

A Non 3G, iPhone 3G

Nathan Burley, an Australia-based analyst with the international research firm, Ovum, explains, “There is no other iPhone model to sell so that is the only model available. Apple is pushing the 3G model very aggressively. I think there are a lot of un-locked or cracked iPhone available in India. But through this, Apple will get the Indian market. Well, the iPhone 3G will run on 2G network as well, so you will be able to do a lot of things like the Internet access and other stuff, but the experience will not be that good as compared to running these on a 3G network. Still since iPhone is more about a style statement and the rich interface so at least people will be able to use it and flaunt it.”

When Will It Be 3G?
It is going to take quite a while for Indians to reap the benefits of 3G that the device offers? Looking back in history, there have been more promises made than met. The frequency that 3G networks use was assigned to defence forces in India, and it took quite a time to release that frequency as defence forces needed to build the infrastructure to migrate from that frequency. That was followed by the expulsion of the much adored minister Dayanidhi Maran due to some political issues. The change of minister further delayed the arrival of 3G in India.

A. Raja took over as the minister of communications and information technology in May last year and after taking his time to settle down has started the 3G drive. The government is trying to put things in place by announcing 3G guidelines and policies. There will soon be an auction of the 3G spectrum in India by the end of September.

Just few days ago, Indian government approved the release of one block of the 3G Spectrum each to BSNL and MTNL, the two public sector telephone service providers. The Spectrum blocks released for the two companies have the size of 2×5 MHz in 2.1 GHz Band. “Besides this special consideration for BSNL and MTNL, 3G/BWA Spectrum would be allocated through an auction
process to be conducted by a specialised agency. For the Spectrum blocks released to them, BSNL and MTNL will pay a price equal to the highest bid in the respective service areas,” a press statement says.

Source: EFY Times

Fair Labor Standards Act: Six Things Tech Workers Need to Know

August 19, 2008

The class-action lawsuit that current and former Apple employees have filed against the iPhone-maker raises questions about what kinds of workers are covered by the FLSA. Here’s what you need to know about this often confusing law and your rights to overtime pay.

1. The FLSA is a weak law

2. Employers have little incentive to classify salaried employees properly.
Since employers know the law isn’t highly enforced, they may be tempted to err on the side of classifying white collar workers as exempt so that they don’t have to follow the FLSA’s requirements, says Sagafi.

“The advantage to a company of classifying somebody as exempt is that the company can make the employee work as much as it wants, and the employee’s only remedy is to ask for more money, quit or sue for back wages,” says the attorney.

3. There are five different kinds of exemptions.
The five different kinds of exemption from the FLSA are the administrative exemption, the computer professionals exemption, the executive exemption, the professional exemption and the highly compensated exemption.

The professionals who fall into any one of those five exemptions are not covered by the FLSA. (To be exempt from the FLSA means that you’re not covered by that law. To be nonexempt means that you are covered by the law and therefore are eligible for overtime pay and for other protections.)

The administrative exemption is the most complicated, says Sagafi. “It hinges on whether the employee ‘exercises independent judgment and discretion with respect to matters of significance’ for the company,” he says, quoting the law. In other words, if a professional exercises his or her own judgment, creativity, vision, leadership and autonomy in performing his or her job duties in a core area of the business, he or she is likely to be exempt under the administrative exemption.

“If you don’t exercise independent judgment, if you perform rote, repetitive tasks in accordance with guidelines, protocols, checklists or established procedures, you’re not likely to be exempt under the administrative exemption because you’re not exercising discretion. You’re just following the rules,” adds Sagafi.

The computer professionals exemption mainly applies to computer systems analysts, computer programmers, software engineers and software developers whose primary duties consist of some combination of design, development, documentation, analysis, creation, testing or modification of computer systems and programs, and who earn at least $455 per week on a salaried basis. It does not pertain to help desk workers or to employees involved in the manufacture or repair of computer hardware.

The executive exemption pertains to employees involved in managing the entire company or a department or division of the company, who manage at least two people, have the authority to hire, fire and promote employees, and who earn at least $455 per week on a salaried basis.

The professional exemption applies to “learned” professionals (e.g. doctors and lawyers) and to creative professionals (e.g. graphic designers, copy writers.) Finally, if you earn $100,00 a year or more, you’re exempt from the FLSA under the highly compensated exemption.

Sagafi says that Apple will have to prove that network engineers fall into either the administrative exemption or the computer professionals exemption in order to counter the plaintiffs’ claim that they should have received overtime.

4. Your title is irrelevant legally.
Sagafi notes that the job title of “network engineer,” which is at issue in the Apple case, is irrelevant when it comes to determining whether or not an employee is exempt from the FLSA, since job titles can be overblown.

“Companies like to give fancy titles to employees because it’s a costless way for them to make their employees feel valued, and it has a corollary benefit of making employees sound like they fit an exemption if the employer has an eye to getting sued,” says Sagafi.

5. What matters is how you perform your work.
Sagafi acknowledges that IT professionals are highly skilled and possess specialized knowledge, but he says, that has little bearing on whether or not they fall into an exemption.

“What matters is whether they have autonomy and discretion,” he says. “We’ve found in these cases that there are established protocols and pathways and instructions and guidelines and ways of doing things that they have to follow time and time again.”

Sagafi points to the work IT professionals have to do to update virus protection software or to diagnose problems with routers as examples of rote, repeatable tasks that don’t involve a lot of personal judgment. “You get an alert from a third party software vendor, and you know what the steps are [to install those updates] because you did it last week. There’s a right way to do it and not a lot of choice in the matter,” he says. “Or, if there’s an error showing up on the monitoring software with respect to a router, you know you have to check 11 different aspects of the router and when you find the thing that is wrong with the router, you fix it, and there’s only one fix and there’s not much choice in the matter.”

6. If you’re going to sue, file a class action suit.
It’s hard for individuals and small groups to win these kinds of overtime cases, Sagafi says, because the FLSA is so complicated and because it consequently takes so much time and money for the attorneys to prove the employer’s liability. A class action suit, he says, gives the plaintiffs the strength in numbers and the lawyers the economies of scale that they need to prove their case.

FDA Globalization Bill Evolving Into New GMP Legislation

August 19, 2008

As Congress continues its work on the FDA Globalization Act, a bill originally aimed at increasing FDA inspections of manufacturing facilities, the legislation is evolving into a new GMP law.

The first discussion draft of the bill, which included documentation requirements for imported drug ingredients and facility registration fees to defray the cost of overseas inspections, was released earlier this year. A second draft of the legislation was released last month by the House Energy and Commerce Committee.

The second draft would require drugmakers to manufacture pharmaceuticals under quality risk management plans and firms to conduct periodic audits to monitor suppliers. The bill also describes elements that risk management plans must contain.

“A quality risk management plan … shall address risk assessment, risk control, risk communication and risk review,” the draft states. Such plans would need to require pharmaceutical companies to use vendor qualification programs for raw materials and ingredient suppliers as well as for third-party contract manufacturers.

Quality risk management plans would have to be periodically revised and updated and would “define responsibilities and communication processes for manufacturing, quality control and quality assurance activities” for suppliers and contractors, the bill states.

In addition, risk management plans must have effective systems “to detect any hazard that has been, or is reasonably likely to be, present in or on the drug,” including appropriate specifications and test methods to verify the quality, identity, purity and strength of drug ingredients, according to the draft.

A copy of the drug-related portions of the new FDA Globalization Act draft is available at www.fdanews.
com/ext/files/Revised FDAGA Draft Drug Safety Title.pdf

FDA may mandate drug training

August 19, 2008

Perhaps triplicate prescriptions are not enough of a safety measure when it comes to powerful narcotics. At least, that’s what the FDA might be thinking. The agency is considering mandatory training for clinicians who prescribe certain narcotic medications, including methadone, fentanyl and some versions of oxycodone.

It’s a move that would be controversial and one that the FDA cannot make in a vacuum, according to Bob Rappaport, the agency’s director for the division of Anesthesia, Analgesia and Rheumatology Products, as states usually have jurisdiction over regulatory and education issues when it comes to physicians.

As it stands, a state medical license and a simple registration with the Drug Enforcement Administration are all that are necessary for a physician to prescribe narcotics. At present, states like California that require additional training are the exception rather than the norm.

Read the full story in the New York Times

10 tax-smart tips for salary earners

August 19, 2008

1. Exemption on soft furnishing expenses Sec. 10(14) [of the Income Tax Act] offers exemption for expenses (and not allowances) incurred wholly, necessarily and exclusively in the performance of the duties. There are two distinct arguments to render soft-furnishing non-taxable.

The first one is to claim that the employee needs to entertain guests at his residence for official purpose. The second one is that the expense is incurred to protect the furniture belonging to the office at the residence of the employee from deterioration.

2. Notice period salary equivalent paid to employer is not tax deductible

Most employment conditions require an employee who desires to change his job, to give his employer a notice of his intentions and serve him for certain pre-fixed months.

In case an employee desires to leave the services immediately, or before the notice period, he should pay the employer an amount equivalent to the salary he would have earned during the notice period or shortfall thereof. Is this amount deductible from the salary income of the employee?

What the employee is paying to the employer cannot come under the head ‘Salaries’ since he is not the employer’s employer. This amount represents application of his income and therefore, it is not deductible. He has merely applied this income to discharge a liability and therefore, it is not tax deductible.

This is the view generally accepted by all accountants and the income tax department.

3. Employment after retirement can be less taxing

These days many employees are re-employed by their ex-employers on retainership or contractual basis after their retirement. The fact that the person happens also to be the ex-employee is immaterial and inconsequential.

Such a person enjoys better concessions than a normal employee. He can claim deductions for expenses incurred for earning his consultancy fee. Moreover, the TDS applied by the principal would be only 10% of the fee paid.

4. How gardener and helper can be tax-free perks

Here, two points are of great interest:

Circular 122, dated 19.10.73, clarified that if the employer employs a gardener for a building belonging to the employer, it would not be treated as a perk. This principle continues to be applicable even now with the possibility of it being extrapolated to other servants.

This is more interesting. A helper engaged for the performance of the duties of an office or employment of profit; is not considered as a perk under Rule 2BB, read with Sec. 10(14). Many employees, particularly at the top level, and especially in view of communication handshakes available through e-mail, do not necessarily work only in the office. Some part of the work is done at residence. We will go to the extent of stating that the employee can directly engage the services of a helper and claim reimbursement from the employer without it being considered as a perk.

5. Tax nuances when a house / flat is given on lease to employer

Top management category employees usually get rent-free residential house as a perk. Sometimes, the flat belongs to the employee, taken on lease by the company from the employee and the employee is allowed to reside in it.

In other words, the landlord of the residential flat used by the employee is the employee himself and simultaneously he is also a tenant.

Under such a situation, the employee will have to pay tax on the lease rent received as income from house property and also as perk. Is this double taxation? Definitely not. The employee is enjoying double benefit and will have to pay tax on each benefit separately.

Is this flat self-occupied or let-out? Of course it is let-out. No one can pay rent to himself.

The Sec. 80C deduction is possible both on self-occupied and let out flats. The interest is deductible in full since the flat is let out. If the employee pays some rent to his employer, this rent cannot be deducted from the lease rent for tax purpose. This rent will be taken cognisance of while computing the perk value.

Before the revision in perk values, many of the employees used to give their flats or the flats of their wives on lease to the employers and benefit immensely. Now, after the large-scale amendments to perk values, the advantage has been watered down.

Nevertheless, normally the lessor takes an interest-free deposit from the lessee. This is a deposit and not a loan. Consequently, it does not have any perk value. We do not think the Department will question the size of the deposit in such cases.

6. Interest on deposit for a leased flat

The ITO cannot treat the difference between the market rate of interest and the actual interest paid by the landlord to his tenant on deposits placed by the tenant in custody of the landlord, as further rent received. [CIT v Satya Co. Ltd., (1994) 75Taxman193 (Cal.)].

7. LTA and Relatives

As per the Rules, you can claim the LTA benefit only twice during the block of 4 years. For this purpose

You should be on leave.

You should travel.

During such travel you may have your family with you. Family includes spouse, children as well as dependent parents, brothers and sisters. In respect of children born on or after 1.10.98, the exemption will be restricted only to two surviving children unless the birth after one child has resulted in multiple births.

The expense incurred by you is exempt up to the LTA received.

Obviously, if your wife and other family members travel, without you accompanying them, no LTA can be claimed.

LTA and working couple

Take the case of a working couple. Both the husband and wife can claim the exemption on LTA from their employers and claim benefit for 4 journeys in one block. There is no need for them to take the precaution of not travelling twice during the same year.

Moreover, they can take the same family members or different ones as long as they stick to the definition of the members for this purpose.

8. Tax-free perks of ex-employees

Aditya Cement Staff Club v Union of India & Others is an interesting case which states that where an employee has resigned and is allowed to occupy company quarters free of rent or at concessional rent, it is not to be taken as perk value, unless it is a contractual obligation to that effect according to the terms of employment.

In order that any benefit, amenity or payment may be termed as perquisite, it must be in pursuance of a right conferred on or option given to the employee to receive such benefit or advantage from his employer.

Unless such advantage or benefit flows from the status of the person working as an employee it cannot be termed as perquisite. The employee must have a vested right to claim advantage or benefit whether in cash or in kind, in order to fall within the purview of perquisite as part of salaries taxable under the ITA.

9. Provident Fund not encashed

Interest on Registered Provident Fund (RPF) of an employee is tax-free. Does it still remain tax-free after the employee retires and does not claim his Provident Fund for say 2 to 3 years?

If one goes strictly according to the drafted provisions, it appears that this interest is tax-free since the amount becomes payable only when the ex-employee asks for it. However, we are told that many ITOs take the stand that the balance in Co-PF gets the colour and character of company fixed deposits when the employee retires. This stand is challengeable.

10. When PF becomes taxable

If an employee leaves the service before completion of 5 years, Rule 10 of Part A of Schedule IV, requires the trustees of a Recognised PF to deduct tax when the accumulated balance due to an employee is paid. This payment is to be treated as income chargeable under the head ‘Salaries.’

Rule 9 puts a different responsibility on the Assessing Officer. He shall calculate the total of the various sums of tax which would have been payable by the employee in the respect of the total income for each of the related years to arrive at the amount by which such total exceeds the total of taxes paid by the employee for such years.

This excess amount is payable by the employee in addition to tax on the income during the year in which the accumulated balance of PF becomes payable.

According to Rule 8 of Part A of the Fourth Schedule, this requirement of 5 years shall not be applicable where the service has been terminated by reason of the employee’s ill-health, or by the contraction or discontinuance of the employer’s business or other causes beyond the control of the employee.

All the same, it is not clear if the employer’s contribution becomes taxable if the employee has to retire on attaining superannuation age after a continuous service of less than 5 years. It is our considered opinion that since the retirement is beyond the control of the employee, the amount does not become taxable.

It is erroneous to feel that the employee’s contribution to PF is not taxed during the year of contribution. It is fully taxed in any case. All he gets is the deduction which stands withdrawn if the employee withdraws the PF before 5 years. To tax the contribution once again in the year of withdrawal is tantamount to double taxation.

In the case of unrecognised provident fund, there is a triple taxation if the employee withdraws within 5 years. Not only he is not allowed any deduction on his own contribution but also the employer’s contribution is taxed during the year of contribution and also during the year of withdrawal.

Source: Rediff

What is a clinical trial?

August 19, 2008

For the purposes of registration, a clinical trial is any research study that prospectively assigns human participants or groups of humans to one or more health-related interventions to evaluate the effects on health outcomes. Interventions include but are not restricted to drugs, cells and other biological products, surgical procedures, radiologic procedures, devices, behavioural treatments, process-of-care changes, preventive care, etc.

What is the difference between a clinical trials register and a clinical trials registry?

A clinical trials register is the formal record of an internationally agreed minimum amount of information about a clinical trial. This record is usually stored in and managed using a database.

A clinical trials registry is the entity that houses the register, and is responsible for ensuring the completeness and accuracy of the information it contains, and that the registered information is used to inform health care decision making. A clinical trials registry is more than its database.

Source: WHO

You can also refer complianceonline to see good webinar on clinical trials