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TCS to Kick Off Earnings Season with Projected Revenue Rise, Margin Concerns

Monika Shanmugam
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TCS to Kick Off Earnings Season with Projected Revenue Rise, Margin Concerns

Tata Consultancy Services (TCS) is set to launch the earnings season on Thursday, forecasting a revenue growth of 1.3-1.5% for the quarter ending June 30, 2024. This period marks a critical juncture for India’s IT sector, which has faced challenges due to reduced discretionary spending by enterprises amid high interest rates.

Despite the revenue uptick, margins are expected to shrink. Analysts predict a contraction of 110 basis points to 24.9%, primarily due to wage hikes. TCS’s net profit is forecast to hit ₹12,310 crore, up 10.7% from ₹11,120 crore in the same period last year.

Prabhudas Lilladher projects TCS’s revenues at $7.44 billion for the first quarter of this fiscal year, showing a 3% year-on-year increase and a 1.1% sequential rise. In rupee terms, revenues are expected to reach ₹61,240 crore, reflecting a 1.4% increase from the January-March 2024 period and a 4.6% rise compared to the same quarter last year.

‘Although some macro indicators hint at recovery, deal conversion and closure activities remain steady with no significant change,’ Prabhudas Lilladher analysts noted. They added that anticipated improvements in operating performance for Tier-1 companies have led to a slight re-rating across the board. ‘However, we await a more consistent and constructive recovery in overall demand,’ they observed.

Optimism is growing that the IT sector’s difficult phase may be ending, with a gradual improvement expected in the coming months. The US Federal Reserve is anticipated to start cutting rates by September, though initially, the easing cycle may be shallow.

BNP Paribas, citing its global strategists, maintains a positive outlook for the IT sector, noting resilient growth, increasing earnings, benign inflation, and modest rate cuts. They predict a rise in the cumulative number of rate cuts priced until the end of 2025, which should benefit the IT services sector.

Infosys emerges as BNP analysts’ top pick in the sector. ‘We prefer to play the demand recovery cycle with Infosys, where expectations are modest and valuations are reasonable,’ they stated.

As TCS prepares to report its earnings, the industry watches closely for signs of revival and sustained growth in India’s IT landscape.

‘Landmark Victory’: Copyright Office Finalises Rule Change on Streaming Royalties

Akash G Varadaraj
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‘Landmark Victory’: Copyright Office Finalises Rule Change on Streaming Royalties

In a significant development for songwriters reclaiming their music rights, the U.S. Copyright Office has solidified a crucial rule regarding streaming royalties. This ruling clarifies who receives payments from platforms like Spotify after songwriters invoke their termination rights.

The finalised rule addresses concerns raised over a previous policy by the Mechanical Licensing Collective (MLC), which critics argued could indefinitely funnel streaming revenues to former owners even after rights were reclaimed. Advocates, including renowned artists like Don Henley, Sheryl Crow, and Sting, rallied behind revisions to ensure fairness under copyright law.

Jordan Bromley of the Music Artists Coalition hailed the decision as a ‘landmark victory for songwriters,’ emphasising that it not only guarantees fair compensation but also reinforces the integrity of copyright in the digital era. The MLC, in response, welcomed the guidance and committed to implementing necessary changes to comply with the new rule.

Key to the issue is how the MLC’s blanket license interacts with termination rights granted by federal law, which allow songwriters to regain control of their works sold decades earlier. The rule aims to balance the rights of songwriters while respecting existing licenses and derivative works created during prior ownership.

Despite initial disagreements and a lengthy public comment period, the Copyright Office’s final rule underscores that royalties rightfully belong to post-termination copyright owners. It mandates corrective adjustments to rectify any prior improper payments, a move supported by industry stakeholders for its clarity and fairness.

David Israelite, President & CEO of the National Music Publishers’ Association, praised the outcome, noting that clear guidelines will streamline processes and ensure prompt payments to songwriters reclaiming their copyrights. Industry-wide, the decision has been met with acclaim, with stakeholders affirming its role in protecting creators’ rights in the digital music landscape.

This ruling marks not just a regulatory change but a pivotal moment for music creators seeking equitable treatment in a rapidly evolving industry. As the Copyright Office enacts these reforms, it sets a precedent for safeguarding the rights of artists in an increasingly complex digital ecosystem.

As you navigate these significant changes in copyright law, ensure you have the right legal support to protect your rights and maximise your earnings. Vakilsearch offers reliable, efficient, and affordable legal services, providing expert guidance and comprehensive support to help you make the most of new regulations. Choose Vakilsearch for a seamless legal experience, ensuring your creative works are protected and fairly compensated in the digital era.

Budget 2024: No Tax on Annual Income up to ₹8.5 Lakh if the Basic Exemption Is Raised to ₹5 Lakh

Akash G Varadaraj
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Budget 2024: No Tax on Annual Income up to ₹8.5 Lakh if the Basic Exemption Is Raised to ₹5 Lakh

Finance Minister Nirmala Sitharaman is set to unveil the Modi government’s first budget 2024 of its third term on  23 July 2024, with widespread anticipation among taxpayers, particularly from the middle-class, for significant tax relief measures. One of the key expectations is an increase in the basic tax exemption limit from the current ₹3 lakh to ₹5 lakh.

If implemented, this adjustment could mean that individuals earning up to ₹8.5 lakh annually might be exempt from income tax, factoring in the standard deduction and the rebate under Section 87A, as explained by CA Satish Surana. Such a move is seen as a substantial boost to disposable incomes for millions of taxpayers.

Under the current tax regime, income up to ₹7.5 lakh is tax-free, considering the existing exemption limit and applicable rebates. The upcoming budget is expected to introduce revised tax slabs that align with the proposed exemption changes, potentially benefiting a wider segment of taxpayers.

Experts also anticipate enhancements in other tax benefits, hoping for an increase in standard deductions and new deduction benefits under the revised tax regime. This shift aims to ease the tax burden on middle-income earners and stimulate economic growth through increased disposable incomes.

Stay tuned for more updates as the Union Budget 2024 approaches, promising crucial developments in India’s tax landscape. Vakilsearch offers reliable, efficient, and affordable legal services, providing expert guidance and comprehensive support to help you make the most of new tax relief measures. Choose Vakilsearch for a seamless legal and tax compliance experience, ensuring your financial planning is optimised and compliant with the latest regulations

 

IPONZ Rejects India’s Application for Basmati Rice Trademark

Akash G Varadaraj
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IPONZ Rejects India’s Application for Basmati Rice Trademark

The Intellectual Property Office of New Zealand (IPONZ) has declined the Government of India’s application for Trademark certification of the BASMATI word mark, citing the legitimate rights of rice growers outside India to use the term.

BASMATI, a fragrant long-grain rice variety, is traditionally grown in the Indian subcontinent. The Indian government sought exclusive rights to the term to preserve its cultural and economic significance. However, IPONZ’s decision highlights a broader debate over geographical indications and the rights of producers from various regions.

The Government of India argued for exclusive rights based on BASMATI’s historical association with its agriculture and culinary traditions. Yet, IPONZ noted that evidence showed other countries, such as Pakistan, also contribute significantly to the BASMATI rice market.

This decision is expected to ignite further discussions and legal challenges regarding geographical indications in international trade. The Trade Development Authority of Pakistan has also applied for certification to protect its own rights to BASMATI.

This decision is unlikely to mark the end of the ongoing battle over the BASMATI mark. We will continue to monitor developments and provide updates.

In light of the complexities surrounding trademark registration, such as the recent decision by the Intellectual Property Office of New Zealand (IPONZ) regarding the BASMATI word mark, it’s crucial to seek professional assistance to navigate the intricacies of intellectual property laws. Vakilsearch offers comprehensive trademark filing services that can help businesses and individuals secure their brand identity effectively.

Amid NEET-UG 2024 Uncertainty, Private Colleges Start ‘Booking Seats’

Akash G Varadaraj
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Amid NEET-UG 2024 Uncertainty, Private Colleges Start ‘Booking Seats’

Several private medical colleges in Tamil Nadu have ignited controversy by commencing admissions for undergraduate programs amidst ongoing Supreme Court deliberations on NEET-UG 2024. Allegations of a question paper leak during the May exam have cast a shadow over the process.

Some institutions have chosen discreet tactics, while others boldly advertise ongoing admissions. Posters prominently display offers to ‘book’ seats for an ‘advance’ fee ranging from ₹2 lakh to ₹3 lakh.

Concerns escalate when parents inquire about admission procedures. Student counsellor Manickavel Arumugam highlighted, ‘Parents are required to attend meetings on campus after surrendering their mobile phones and electronic devices.’ He emphasised the restrictive nature of these interactions.

Once inside, prospective candidates are urged to pay ₹3 lakh upfront to secure a seat. They are then advised to prioritise colleges affiliated with deemed universities during counselling. IT professional Sudharshan Y revealed, ‘Students are promised annual fee reductions ranging from ₹3 lakh to ₹5 lakh, with the advance payment credited towards first-year fees. Additionally, scholarship certificates aim to further alleviate financial burdens.’

Sudharshan recounted assurances from an admission manager regarding over 600 available seats and expressed confidence in securing a position. ‘We were assured of a refund if unable to secure a seat despite selecting affiliated colleges as our top choices,’ he added.

Meanwhile, another institution mandates advance payments between ₹3 lakh to ₹5 lakh, followed by document submissions for proxy application during counselling. Anand Kumar M cautioned, ‘Admission managers insist on immediate fee payment to preempt rising cut-offs in subsequent rounds.’

Authorities have unequivocally condemned these practices as unlawful. A senior official from the National Medical Commission affirmed, ‘Admissions to medical colleges must adhere to guidelines set by the Medical Counseling Committee of the Directorate General of Health Services or the state selection committee. Any upfront fee collection is prohibited.’

The official further cautioned against unauthorised admissions and urged stakeholders to await official counseling processes. ‘We urge parents and students to refrain from participating in these irregular practices,’ the official warned, noting that the commission would take action against any reported infractions backed by evidence.

As uncertainty looms over NEET-UG 2024, these developments underscore ongoing challenges in maintaining fairness and transparency in medical college admissions in Tamil Nadu. Vakilsearch can play a crucial role in advising and supporting students, parents, and institutions to navigate this complex landscape. By offering legal guidance and ensuring compliance with established guidelines, Vakilsearch can help uphold the integrity of the admissions process.

TN Government Appoints an One-Man Commission to Propose Amendments to New Criminal Laws

Akash G Varadaraj
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TN Government Appoints an One-Man Commission to Propose Amendments to New Criminal Laws

In a decisive move, the Tamil Nadu government has appointed a one-man committee under retired Madras High Court judge K. Sathyanarayanan to propose state-specific amendments to three new criminal laws. The announcement came after a meeting chaired by Chief Minister M.K. Stalin at the Secretariat in Chennai on Monday.

The committee will review the ‘change in nomenclature’ of the new laws at the state level and will consult with various stakeholders, including lawyer associations. Recommendations are expected within a month, as stated in an official press release.

Present at the meeting were Minister Duraimurugan, Advocate-General P.S. Raman, Chief Secretary Shiv Das Meena, Director-General of Police Shankar Jiwal, and other senior officials.

The newly enacted laws, replacing the Indian Penal Code, the Criminal Procedure Code, and the Evidence Act, came into effect on 1 July 2024. However, Chief Minister Stalin had previously written to the Union Home Minister in June, requesting a delay in their implementation until state concerns were addressed.

Last week, various lawyer associations met with the Chief Minister, urging him to push the Union government to reconsider the new laws due to numerous concerns. Demonstrations against the new criminal laws have taken place across the state.

Vakilsearch stands ready to assist stakeholders in understanding the implications of these proposed amendments and navigating the evolving legal landscape. Our expertise in legal compliance and reform will be invaluable in helping clients stay informed and prepared for any changes.

 

Delhi HC Orders To Prepare a Code of Conduct for Regulating Patent and Trademark Agents

Akash G Varadaraj
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Delhi HC Orders To Prepare a Code of Conduct for Regulating Patent and Trademark Agents

In a landmark ruling, the Delhi High Court has ordered the formulation of a code of conduct for regulating patent and trademark agents in response to rising concerns over negligence and misconduct in the field. Justice Prathiba Singh issued the directive in the case of *Saurav Chaudhary vs. Union of India & Anr*, highlighting the need for stringent guidelines to safeguard the interests of client

Saurav Chaudhary filed a patent application for a ‘Blind-Stitch Sewing Machine and Method of Blind Stitching’ on  3 August  2019, through M/s Delhi Intellectual Property LLP. His patent agent, Naveen Chaklan, failed to respond to the First Examination Report (FER) despite multiple follow-ups, leading to the abandonment of the application. Chaudhary subsequently filed a writ petition to restore his patent application.

Justice Singh underscored the critical role of patent agents in maintaining timely communication with clients and adhering to procedural requirements. She cited previous judgments, including ‘The European Union Represented by the European Commission v. Union of India & Ors.’, emphasising that courts should be lenient in cases of mistakes by patent agents, similar to their approach with legal counsel errors.

The judge stressed that while legislative timelines must be respected, exceptional cases warrant a flexible approach to prevent undue harm to applicants. She called for the issuance of a draft Code of Conduct by the Controller General of Patents, Designs & TradeMarks (CGPDTM) within two months, followed by stakeholder consultations and formal notification by  31 December 2024.

Current legislation, such as Section 130 of the Patent Act and Rule 114 of the Patent Rules, allows for the removal of patent agents for professional misconduct. However, the term ‘professional misconduct’ is not clearly defined, and existing frameworks are inadequate for addressing negligence.

Justice Singh’s judgement advocates for a structured framework similar to those governing advocates and chartered accountants. This would include clear definitions of professional misconduct, guidelines for behaviour, and a dedicated body to oversee compliance and address complaints.

A well-defined code of conduct could significantly enhance the reliability and trustworthiness of patent and trademark agents. Specific issues addressed could include:

  • Non-filing of examination requests
  • Failure to communicate FERs to clients
  • Non-filing of replies and follow-ups
  • Ignoring hearing notices
  • Non-compliance with procedural timelines

However, the effectiveness of such a code depends on robust enforcement mechanisms. The CGPDTM must ensure the regulatory body is adequately empowered to investigate complaints, conduct hearings, and impose sanctions. Additionally, the dynamic nature of patent law necessitates flexible yet clear standards to adapt to varying situations.

 The Delhi High Court’s mandate for a Code of Conduct for patent and trademark agents signifies a critical stride towards accountability and client protection in the intellectual property domain. As regulatory frameworks evolve, businesses can benefit from proactive compliance strategies to uphold ethical standards and mitigate risks effectively. Vakilsearch remains committed to assisting clients navigate through these regulatory developments and uphold the highest standards of professional conduct.

 

E-way Bill Generation Slows but Stays Above 100 Million in June

Akash G Varadaraj
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E-way Bill Generation Slows but Stays Above 100 Million in June

In a clear sign of strong manufacturing activity, over 100 million e-way bills were generated in June for the shipment of goods within and across states. This milestone, achieved for the fourth time, underscores a vibrant end to the first quarter of 2024-25. E-way bill generation had previously crossed the 100-million mark in May with 103.1 million bills and set a record in March with 103.5 million. Last October also saw over 100 million e-way bills, according to the Goods and Services Tax Network (GSTN).

In comparison, June 2023 witnessed 86 million e-way bills. The taxes from these June transactions will be collected in July, likely boosting GST collections further. For the past four months, GST collections have surpassed ₹1.7 trillion, with June alone bringing in ₹1.74 trillion. In July 2023, GST collections stood at ₹1.65 trillion.

High-frequency indicators like purchase managers’ assessments and Indian Railways’ freight activity support this trend. S&P Global reported on July 1 that the HSBC India manufacturing PMI rose to 58.3 in June from 57.5 in May, indicating robust demand. This index, based on feedback from 400 manufacturing companies, signals improvement when above 50.

Indian Railways also reported a 10% year-on-year increase in originating freight loading for June, reaching 135.46 million tonnes, with freight revenue up by over 11%. However, the auto sector lagged, with retail auto sales growing just 0.73% year-on-year to 1.88 million units in June due to heatwave conditions and a delayed monsoon. June is typically a slow month for auto sales in India.

Abhishek Jain, indirect tax head and partner at KPMG, highlighted the significance of these trends in a popular news articles: ‘Sustained growth in e-way bill generation indicates continued economic activity and compliance with GST law, although economic growth and GST collections depend on various factors such as the value of taxable supplies and the growth of services.’

Overall, the surge in e-way bills suggests a consistent upswing in economic activities, reflecting a resilient manufacturing sector and a promising outlook for the country’s economic health.

The continued momentum in e-way bill generation augurs well for India’s economic outlook, supported by buoyant GST collections and improved freight activity. As economic indicators remain positive, businesses can leverage this data to strategise effectively amidst evolving market dynamics. Vakilsearch stands ready to assist businesses in navigating compliance requirements and seizing growth opportunities in an expanding economic landscape.

PM Modi-Putin Meeting: Russia Agrees to Release All Indians Recruited Into Its Army

Akash G Varadaraj
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PM Modi-Putin Meeting: Russia Agrees to Release All Indians Recruited Into Its Army

In a private dinner hosted by President Vladimir Putin on Monday night, PM Modi raised the critical issue of Indian nationals serving in the Russian military. Following the discussions, Russia agreed to release all Indian citizens working in its army, according to unnamed sources cited by ANI.

On  22 February 2024, Mohammed Imran showed a photo of his brother, Mohammed Asfan, who was stranded in Russia near the war-torn Ukraine border, at their home in Hyderabad. Among the Indian nationals employed by Moscow for the Russian Army in Ukraine are an apple farmer, an airline caterer, and an out-of-work graduate.

Tragically, at least two Indian citizens have lost their lives in the conflict, with many others claiming they were deceived into joining the combat. During the dinner, Modi emphasised the need for the swift discharge of Indians from the Russian military and assistance in their safe return.

A top Indian official told Reuters last week that Modi’s priorities in Moscow included addressing India’s trade imbalance with Russia and securing the discharge of Indian citizens misled into fighting in Ukraine. PTI reported that India would raise the issue in the strongest terms. ‘We want the expeditious discharge of Indians fighting in the Ukrainian conflict from the Russian military,’ a source said.

Reports suggest up to 200 Indian nationals were recruited by the Russian military as support staff, though sources believe the number is closer to 100. Establishing contact with these individuals has been challenging due to frequent military unit movements and poor communication.

The external affairs ministry previously advised Indian citizens to exercise caution when seeking employment opportunities in Russia. Many Indians were duped by recruiting agents in Indian cities and Dubai, leading to deaths and injuries among those enlisted. Videos on social media have shown Indians seeking help to escape these positions.

The Central Bureau of Investigation (CBI) recently dismantled a human trafficking network across several states that lured young men with promises of high-paying jobs in Russia. A viral video showed men from Punjab and Haryana, dressed in army uniforms, pleading for help after being tricked into fighting in Ukraine.

As PM Modi and Putin prepare for talks amid global outrage over Russian strikes in Ukraine, Modi’s visit to Moscow aims to strengthen India-Russia relations while also fostering closer Western security ties. Kremlin spokesman Dmitry Peskov stated, ‘The main thing is to create an atmosphere for meaningful interaction.’

Rahul Gandhi and MK Stalin Respond to the Murder of K Armstrong in Chennai

Akash G Varadaraj
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Rahul Gandhi and MK Stalin Respond to the Murder of K Armstrong in Chennai

In a shocking turn of events, eight men have been arrested in connection with the murder of K Armstrong, the Bahujan Samaj Party’s (BSP) Tamil Nadu chief. Armstrong was brutally hacked to death by bike-borne assailants near his residence on Friday. The murder has sent ripples of outrage across the political spectrum.

Tamil Nadu Chief Minister MK Stalin expressed his deep sorrow and ordered an expedited investigation. ‘The assassination of Bahujan Samaj Party State President Armstrong is deeply saddening. I have directed the police to bring the culprits to justice swiftly,’ he posted on X, extending his condolences to Armstrong’s bereaved family and associates.

BSP Chief Mayawati condemned the killing as ‘deplorable,’ emphasising Armstrong’s role as a ‘strong voice’ for Dalits. ‘The state government must punish the guilty,’ she demanded in her statement.

Rahul Gandhi, Congress MP, also expressed his shock, calling the murder ‘brutal and abhorrent.’ He assured continuous coordination between Tamil Nadu Congress leaders and the state government to ensure justice is served promptly.

The Tamil Nadu opposition, led by Edappadi Palaniswamy, criticised  the ruling DMK for the deteriorating law and order situation. ‘The murder of a national party’s state chief is shameful. There is no fear of law or the police,’ he stated.

Preliminary investigations suggest that the Murder of K Armstrong was a revenge act linked to the killing of gangster Arcot Suresh last year. Sources reveal that the suspects include close relatives and associates of Suresh. While some reports claim that the attackers disguised themselves as food delivery agents, the police have not confirmed this.

Armstrong, a lawyer by profession, gained prominence in 2008 after organising a mega rally in Chennai with BSP Chief Mayawati. Despite facing allegations of abduction in the past, he was acquitted by courts over the years.

The police have formed ten special teams under Additional Commissioner of Police Asra Garg to investigate the case. ‘We are interrogating the suspects and will soon disclose the motive behind the murder,’ Mr. Garg told NDTV. This brutal incident underscores the urgent need for stringent law enforcement and justice for Armstrong’s grieving family and supporters.  

 

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