Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: VAT RATES :: list of goods taxed at 4% :: cpt :: Central Excise rule to resale the machines to a new company :: ACCOUNTING STANDARD :: articles on VAT and GST in India :: due date for vat payment :: TDS :: TAX RATES - GOODS TAXABLE @ 4% :: VAT Audit :: ARTICLES ON INPUT TAX CREDIT IN VAT :: form 3cd :: ACCOUNTING STANDARDS :: empanelment :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes
 
 
Direct Tax »
 Hopeful of meeting direct tax collection target for this financial year: CBDT
 Bengaluru tops in income tax probes after demonetisation
 Income Tax department rejects black money disclosures of over Rs 2 lakh crore
 CBDT urges people to protect bank accounts from 'unscrupulous elements'
 No change in gold seizure norms in proposed I-T Law amendments
 Direct tax collection will get a long-term boost, Franklin Templeton says
 I-T Act amendments upset calculations of cash hoarders
 Claim tax benefit on costs incurred to evict tenants
 The Integrated Goods And Services Tax Act, 2016
 Here’s what Income Tax Department did leading up to demonetisation
 I-T department asks IDS declarants to pay tax by November 30

I-T depart to tax pharma firms spending on freebies for doctors
August, 07th 2012

The income-tax department would tax the amount pharmaceutical and allied health sector industries spend on freebies for medical practitioners and their professional associations. Those who accept the freebies will also be taxed.

The decision follows amendment to Medical Council of India regulations banning doctors and their associations from accepting freebies that include gifts, money, travel facility and hospitality extended by pharma companies and manufacturers of medical devices and nutraceuticals.

The August 1 circular of Central Board of Direct Taxes says that the department has come across such instances. A senior official from a pharma company admitted that several companies resort to such practices to advance their sales. He cited the instance of a company, a relatively new entrant, planning to take around 80 doctors from across the country for a full expense paid foreign trip for a `seminar'. "Some of them will be allowed to take their families depending on the doctor's standing," he said. "There have been cases where the doctors decided on the gifts."

Presently, income tax department grants tax exemption to money spent on business promotion. The department accepts companies' claim and allows tax deduction. An income tax official said, "Henceforth, the pharma companies cannot claim this benefit because the regulations prohibit it. And if we can prove that the company extended freebies to doctors, they are liable to pay tax on it. Moreover, those who received these freebies will also have to pay tax on the value of the gift or the money spent on them. For instance, if a doctor received a fridge as a gift, its market value will be treated as his or her income." The department has asked assessing officers take an appropriate action.

Chandra Mohan Gulati, a drug regulatory expert from Delhi, said this is a great first step. "Let it not be the last step. The government should now amend the Companies Act in such a manner that so that companies have to mention in their balance sheets expenditure incurred on doctors or medical associations but disallowed by the IT Act," he said. This will create awareness about the sums spent by companies on wooing the medical fraternity, said doctors. Dr Gulati, who has been called for several meetings on the subject by the government of India, said that the doctors should also be asked to mention details of their "gifts" from pharmaceutical firms.

In 2009, the MCI had set forth guidelines for doctors vis-a-vis pharmaceutical companies. "But that was just a half measure. MCI has no jurisdiction over pharmaceutical companies. Now, with the government of India taking this first step, things should improve," he added.

Ranga Iyer, who formerly headed Wyeth and the OPPI (Organization of Pharmaceutical Producers of India, said, "We should look at the IT Act changes in isolation. The need is for ethical marketing practices for pharmaceutical companies and we support any such move."

Dr Arun Bal of the ACASH (Association for Consumers' Action on Safety & Health), an NGO that works for patients' rights, said, "This follows previous unsuccessive attempts by the MCI and the government of India to bring about self-regulation among doctors and the industry." There is a need for more transparency from the industry, he added. "In the US, companies are asked to mention on their websites all details of the expenses made to doctors and associations."

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
SEO Services SEO LLC e-boost Search Engine Optimization Services Internet Marketing Services Website Placement Services On-site Webs

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions