The BSE-Sensex is up by 43 points while NSE-Nifty is trading 5 points above previous closing. BSE Midcap and BSE Small cap indices are up by 0.8% and 0.9% respectively. The rupee is trading at 44.60 to the US dollar.
IT stocks are trading firm led by Crane Software and Mastek. As per a leading daily, the Income Tax Department has initiated scrutiny on Tata Consultancy Services for claiming tax benefits for onshore services. It may be noted here that onshore software services make up 45% of TCS's total revenues. Onshore development refers to the practice of IT companies sending their employees to work at the client's place abroad including the US and Europe.
The IT department has recently revised its argument that software services provided by Indian companies should be treated as export of manpower and not software. The IT department argues that since professionals are under the control and the supervision of the company abroad, the contract actually amounts to export of manpower. Many software companies book their earnings from onshore work in their units located in the Software Technology Parks of India to avail tax benefits.
Pharma stocks are trading mixed with Elder Pharma and Biocon Limited trading firm while Panacea Biotech and Ranbaxy Laboratories are trading weak. As per a leading financial daily, Global pharma giant Pfizer Inc has sued Aurobindo Pharma over the generic version of Lipitor. It may be noted that Lipitor, is one of the best selling medications in the American market. The annual sales for the drug in the country stand at approximately US$ 7 bn. According to Pfizer, it has exclusive production right of Lipitor until 2017 as per patents covering the blockbuster drug's brand name. Pfizer has now requested the court to refrain Aurobindo from manufacturing and marketing the drug before January 8, 2017. This is the date of expiration of the patent, including the period of exclusivity granted to Lipitor. It is reported that Aurobindo may opt for out-of-court settlement with Pfizer. It may be recalled that earlier this year, Pfizer had filed a patent infringement suit against Dr Reddy's Laboratories over the same drug.