Challenging the status quo

In Lagaan – the Bollywood blockbuster that mixes tales of taxes, passion and cricket with song and dance – the underdogs triumph, but only after an epic battle

The saga of India’s tax system over the last 50 years has not provided as much nail-biting entertainment, but current attempts to reform it are being watched with almost as much interest as the cricket match that dominates Lagaan. And it appears that the stakes may be as just high.

As detailed in the first of this month’s Spotlight features (Cracking the new tax code, page 27), the proposed tax regime is expected to usher in sweeping changes that will affect both domestic and foreign companies. Businesses and investors are watching keenly as existing tax rules, which have long cast a shadow on what is otherwise an attractive destination for foreign investment, look set to be rewritten. However, those companies with investments structured through offshore financial centres like Mauritius are watching with trepidation, fearing that the attractive tax benefits they have long enjoyed are on the brink of being withdrawn.

Our second Spotlight feature (Stepping up the fight, page 31) throws light on recent developments in the fight to enforce intellectual property rights in India – an epic battle just as worthy of the attention of Bollywood’s filmmakers (it is already high on the agenda of Bollywood’s IP lawyers). Our coverage describes how renewed judicial resolve and efforts by industry bodies are reshaping the landscape, but cautions that progress is patchy. While Arjun Rajgopal, an associate at Nishith Desai Associates, commends the courts for being “extremely creative and innovative in designing new remedies,” Sheetal Chopra, head of the IP division of FICCI, portrays a bleak scenario in which the country’s police “do not even know who the copyright owner is”.