India Regulatory Brief: India Eases Foreign Exchange Management Laws, India/Switzerland to Exchange Tax Info
Switzerland to Exchange Tax Info with India
On January 22, the Swiss Government agreed to cooperate with plans for the exchange of tax information with India. The discussions follow India’s pursuit to recover black money stashed by its citizens in foreign jurisdictions.
The partnership was established during talks between Indian Finance Minister Arun Jaitley and his Swiss counterpart Eveline Widmer-Schlumpf at the World Economic Forum in Davos and is a positive step in the bid to quash India’s expanding black money problem.
In 2012, an estimated US$94.76 billion in illicit wealth poured out of India, making the cumulative total outflow US$439.59 billion since 2003, according to Global Financial Integrity.
India Liberalizes Foreign Exchange Management Laws
The Reserve Bank of India (RBI) has liberalized policy on foreign exchange management, allowing resident expatriate employees currently on deputation to a group company or limited liability partnership (LLP) in India to receive their entire salary in an overseas bank account.
RBI has amended Regulation 7(8) of Foreign Exchange Management (Foreign Currency Accounts by a Person Resident in India) Regulations, 2000.
This allows expatriates working for a foreign company in India, and Indian citizens employed by a foreign company abroad, to open, hold and maintain a foreign currency account with a bank outside India. Such persons can then receive their salary in full on deputation to a group company/group LLP in India. A condition of the policy is that income-tax chargeable under the Income-tax Act, 1961, is paid on the entire salary as accrued in India.
The change is prospective in nature and was made effective from December 24 last year.
IT Sector Offers Highest Wage at US$5.55 an hour: Survey
The IT sector has the highest median wage in the Indian economy at Rs 341.8 (US$5.55) an hour, according to the findings of the Monster Salary Index, a joint initiative of Monster India and Paycheck.in.
The report examined overall median wages in India’s economy as well as median wages in several sectors. Finance pays the second highest wage of US$4.73 an hour. The lowest median wage is found in the education and research sector at US$3.03 an hour.
The median gross wage in the construction sector is US$4.21 an hour; is US$3.49 in healthcare; US$3.5 in legal; and US$3.75 in manufacturing and transport.
Gilead Will Appeal India Patent Rejection
Pharmaceutical manufacturer Gilead,whose patent for its expensive hepatitis C drug Solvadi was rejected last week, has indicated that it will appeal the decision and will continue working to get the drug to the Indian market. Gilead is a California headquartered company that focuses developing and commercializing therapeutic antiviral drugs. Solvaidi, also known as sofosbuvir, is an antiviral agent used for treating infections with the hepatitis C virus (HCV). The drug is priced in the US at about $84,000 for a 12 week course, but is expected to be priced at less than $1,000 for the same period in India. However, a study from Liverpool University has shown that the pill could be produced for as little as US$101 for a 12 week course. This means the patent rejection opens up possibilities for “open competition”.
New Regulations Could Allow for Full Mobile Number Portability
The Telecom Regulatory Authority of India (TRAI) has issued draft regulations that could facilitate full mobile number portability starting from May 3 of this year. Once implemented, the new regulations will allow consumers to change their service provider in any part of the country while keeping their existing phone number. The current standards only allow consumers to change their service provider within a telecom circle, which is usually limited to a state.
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