Dear Professionals, Managing E-Resources including acquisition, organisation, access and compliance to Indian Taxation Rules and IPR is a tricky issue. Earlier we had few Lis-forum postings on this matter. These issues have been dealt by very few Seminars/Conferences including one day Symposium on "E-Content: Copyright, Licensing, Taxation and Regulatory Norms" organised by NIMHANS 2013. I wish to share my views in this matter as experienced through discussions/ correspondence I had with different publishers and otherprofessional friends. I request my Professional friends to throw some more light with corrections on this issue, so that the matter will be clear to all those concerned including myself. 1. Unfortunately Indian IT Department treats acquisition of Databases (full texts, bibliographis, statistics, etc) as Software. As a result of this purchase/ subscription of e-books, e-journals and databases has become a serious issue. 2. There is no Service Tax for acquisition of databases produced by foreign publishers. However there is 14% of ST for products of Indian origin (12.5% last year I think). 3. TDS is a must for databases of both Indian and Foreign origin, which varies from country to country. For example for US, UK 15%, for Germany and Netherlands 10% and for Indian databses 10%. I learnt that this year onwards it is 10% for all. 4. These Rules are governed by Indian IT Act Section 195 for databses of foreign origin and Section 194J for Indian databases. 5. If we acquire databases through Indian Agents, it also becomes the duty of agent to adhere to these rules. But how many Indian agents are following them? Many Librarians are misguided by them. 6. However the publishers can claim back the TDS from their respective Governments under the provision of DTAA signed by Govt. of India with different countries using the PAN Card taken by publishers by Indian IT Department. Logic is simple. A product of other country, sold or licenced by Indian set up results in mopping up of income to Indian Government. This is actually is a portion of tax levied to concerned producers of product by the repective country. While I am not clear teh income of publishers by licensing either termed as royalty or business income, attracting different tax liability in some countries. Somebody cant throw more light on this matter. 7. Inspite of our insistence some publishers don't agree for TDS, but we should take firm stand. 8.There are thousands of smaller publishers publishing a single or very few titles. They don't want to take PAN card or they may feel that it is tedious procedure to follow the TDS rules. In such cases it is better to take service of Indian Agents, who take care of TDS on behalf of publishers on mutually agreed terms. *9.* When we insist on TDS some publishers may tell to apply the tax gross up clause and deduct TDS. That means we need to add equivalent of TDS to the invoice of the publishers and deduct TDS. In this case we end up in paying TDS from our side and if we issue TDS certificate, they can even get back the TDS we paid in their country. 10. We have to be careful about some clauses as a part of the invoice, offer or agreement copy like - the price offered is exclusive of any sales, use, withholding, value addted or similar taxes, government levies, etc shall be the responsibility of licensee. 11. The foreign publishers have to produceTax Residency Certificate and PAN card to the licensee, enabling them to get issued the TDS Certificate. 12. A recent Judgement by Karnataka High Cour in case of InfoSys which held that subscription to Databases (Gartner Reports in this case) is liable for TDS deduction. The judgement copy isavailable in the following link. See the applicable ruling for Question no. 2. http://judgmenthck.kar.nic.in/judgmentsdsp/bitstream/123456789/5095/1/ITA422... However there have been few judgemenmts of this kind of conflicting judgements. 13. Many of us including LIS Professionals and even Finance people are not very clear about the stringent rules applicable in this matter. We are also mislead by some publishers and Indian agents. Some of us although aware of the rules ignore them and as a result we will put not only ourselves into problem, but our institutions as well. There are examples of some bigger organisations, who have been asked by IT Department to pay TDS retrospectively, a difficult situation to handle. 14. A number of E-Resources Consortia are in operation in the country. Some of them are centrally funded and some collect licensing money (share) from members of consortia through mandate. In both the situations it is the responsibility of consortia administering institution to deduct the TDS. Few consortia managing set ups finalise the products to be licensed and many a times even negotiate for best price taking advantage of bulk business and mandate to participating colleges, but leave the job of getting invoices and payments on them. In this case it is responsibility of respective college to deduct TDS and do the required procedure. It is the responsibility of Consortia Managers to guide the members/colleges in the matter concerned to TDS. 15. We have to be careful in signing Agreement with the publishers usually written in very small letters. We need to take extra care about use and legal juridiction in case of dispute. It should be governed and construed in accordance with the reciprocal laws. Any dispute(s) arising with respect to/or in connection with the agreement, shall be submitted to the jurisdiction of the courts of India and governed by its laws if there are any claims to be dealt with from Publisher concerned and vice versa. Some publishers put a clause of Laws of their country in both the cases. 16. In case of E-Books licenced on Perpetual Access model, usually publishers ask for annual fees for maintenance of server, etc after 2-3 years. We should find good way of this clause while signing the agreement. We don't have to agree for this. But we may agree to license new content of the publisher in the form of a single E-book or subscribe one journal by the institution or as member of any consortia. We should also add a clause of allowing our users or the library to upload the contents of E-Books on e-book readers like Kindle, etc. We should also get MARC records to upload on our Library WebOPAC with links to the full texts from Publishers site. 17. Suggested Acquisition Procedure and some tips: Tendering? Our authorities and finance people may insist on Tendering Process for procurement of E-Books as a single transaction account more than a Lac and go up to Crores. We don't have to agree for using tendering process if we deal directly from Publishers concerned. More importantly as per General Financial Rules of 2005, Rule 136. Definition of Goods *excludes books, publications, periodicals, etc. for a library (* http://finmin.nic.in/the_ministry/dept_expenditure/gfrs/GFR2005.pdf) and there by allows us to not to call tender not only for E-Resources, but even for print documents. The FPBAI Bulletin issued (GOC), although doesn't have any Governmental Representative, usually its recommendations are accepted by Finance Departments of Institutions confirm this stand. Karnataka Transparency in Procurement Act too defines the Goods same way. In view of this using Tendering Process is not required even though transaction amount is in crores. Both at UoM and Bangalore University an E-Resources Committee constituted by Library Advisory Committee and approved by Syndicate is responsible for selecting E-Resources and negotiating with publishers concerned. If the negotiated amount is big, although not necessary it is advisible to get it aproved by Syndicate again. Other institutions can follow appropriate procedure. It is better we negotiate during the year end month for business of concerned publishers, as they would come to rock bottom in price to reach their business target. The price offered is not uniform for different institutions even from the same publisher. We should bargain on offer price rather than their catalog price. 18. Boosting Usage of E-Resources - Tips: Provide Links to E-Resources through Library/Institutional Website; Provide links to Guides usually provided by publishers; Advertise through NBs and e-mails time to time; Department wise Awareness cum Orientation Programs by ourselves apart from the ones done by publishers; Upload MARC records on Library WebOPAC with Links to full texts on Publisher's Platform; Arrange invited lectures on Accessing E-Resources for the benefit of Research Scholars and Faculty, etc. 19. Acessioning of E-Books: Generate Serial Barcode Number with convenient prefix like EB0001.......EB2014. We can also generate separate Barcode number for each publishers say EBSP... for Springer, EBTF... for T & F E-Books. This will help us search using keyword or any other Metadata in Advanced search for restricting to a particular publishers. One can print Accession register of E-Books for satisfying audit reqquirements if they don't accept online one. But the E-Books licensed will be on the publisher's platform. 20. While IPR Rules mentioed in the agreement copy of the Publishers are stringent walk-in-users clause can be used. But we should avoid few things like repackaging, hosting the e-contents on our site unless licensed for that, systematic downloading, using for commercial purpose, etc. Usually publishers are liberal in this matter unless the violation if serious in nature. Moreover we can only guide and instruct the users to stick on to IPR rules without the possibility of knowing what they do. TAILPIECE: Books and Journals in print medium have always been tax free. Import of CD-ROMs containing educational material are exempted from customs duty and other taxes. With these precedences it should not be difficult for the Government to look at e-books and e-journals from the same perspective. We should take up the matter to both MHRD and Finance Ministry through our Library Associations, Publishers Associations and Academic and Research Bodieslike UGC, CSIR, ICAR, etc. for exclusions library acquisitions of E-Resources from Service Tax and TDS. Once again I request you all throw some more lights or comments, so that this will result for healthy discussion. Regards, - - - - - - - - - - - - - - - - - - Dr. I.R.N. Goudar - Visiting Professor Cum Library Adviser Bangalore University Library, Jnana Bharathi Campus BANGALORE - 560056, India - Ex. Visiting Professor Cum Library Adviser, UoM, Mysore - Ex. Scientist 'G' and Head, ICAST, NAL, Bangalore - Ex. Dy Librarian, IITM, Chennai - Ex. Scientist (Information), IICT, Hyderabad - Fulbright Scholar, Univ. of Michigan and Columbia Univ, USA (1995-96) - British Council Scholar (1982-83) E-mail: goudarishwar@gmail.com Tel: 080-23215510 Mob: 91+9611165781 (If not reachable pl try land line) -- This message has been scanned for viruses and dangerous content by MailScanner, and is believed to be clean.