Citizens' Issues
Public Interest Exclusive
MyVideoTalk using MLM route to pitch customised e-mail messaging products

 The US-based company promises incomes of up to $5,000 per day!

Free e-mail services, free video chatting, free broadcasting are few of the many things made easily available to all of us on the Internet. However, a multi level marketing (MLM) company is thriving on selling such services, which otherwise are mostly available free of cost.

MyVideoTalk (MVT) is a US-based MLM company selling products like video streaming broadcasts and meetings, customized email video messages and on-demand video web channels. It also claims to give rewarding compensation, incentives and other income, on buying its products and recruiting new members.

MVT has two packages each consisting of MyVideo Studio, which introduces the tools to get you started in your business; MyVideo Designer—to create an email and custom design it with full colour images, logos and banners; MyVideo Channel—a fully customizable video website with complete website hosting and support; MyVideo Broadcaster for live broadcasting to host events, trainings, and video conferences and MyVideo WebSite, where one can create personalized website for business and product marketing, among others. Its basic studio package costs Rs15,000 while the business builder studio package costs Rs27,000.

The MLM company also has a host of other income benefits for its members. It pays $50 as fast start retail bonus on the volume of sales by its members on joining. 

In the first month of the sale, 20% commission is paid on the products purchased through the company’s retail shopping portal. The company promises a weekly team commission where a member/representatives can earn up to $150 every time they create 720 WSV (weekly sales value)/360 WSV earning up to $5,000 per day and a maximum of $35,000 per week. Then there are other typical MLM compensation plans such as monthly binary matrix, executive leadership matrix bonus and ultra bonus program.

Experts point out that the company follows a typical MLM plan and is bound to collapse under its own weight in the long run. It also has a questionable business plan. For instance, the company does not have its independent channel to send the customised video messages and has to rely on official channels of Google, Yahoo and Rediff. Interestingly, according to its website, the amount to paid to buy its product is given in Indian rupees, however, all the compensation income is given in dollar terms. 

Moneylife has learnt that the MVT is extensively promoting itself at Nagpur in Maharashtra. Its products were also displayed at CompEx (computer exhibition) organised by the Vidarbha Computer Manufacturers and Dealers Association in January 2012. The company’s website does not have registration address or legal certificates.

 

User

COMMENTS

abhinav

5 years ago

Another company with such modus operandi is talk fusion.
They also are promoting such technology.

AntiPonzi

5 years ago

Maharashtra has become a breeding ground for MULTI-LEVEL MARKETING / DIRECT SELLING / DIRECT MARKETING /PRECISION MARKETING / MONEY CIRCULATION BUSINESS / / MONEY CHAIN BUSINESS etc., etc.

These criminals seem to be moved out from MUMBAI to other districts of Maharashtra.

REPLY

AntiPonzi

In Reply to AntiPonzi 5 years ago

Moneylife once exposed a multi level marketing company. But they are still thriving in Navi Mumabi?

Who will check these people?

"Required marketing people for multi products marketing company at Vashi - Mumbai"

http://mumbai.quikr.com/Required-marketi...

AntiPonzi

In Reply to AntiPonzi 5 years ago

Now, money chains can flourish !!

http://articles.timesofindia.indiatimes....

Economy & Nation Exclusive
Taxing software & satellite channel income of the years when there was no satellite and hardly any software exported!

In its zeal to make everyone a tax evader, an imperious UPA government has made a ridiculous amendment to the Income Tax law with retrospective effect

The Union Budget for the year 2012-13, presented by Pranab Mukherjee on Friday was generally void of any major reforms. However, there has been one major change to the income tax law, which found no mention in the finance minister’s speech. The government has tweaked an important section of the law, which relates to “Income deemed to accrue or arise in India.” The “retrospective amendment” to Section 9 of the Income Tax Act, will come to effect from this year. This means any entity which has adhered faithfully and legally to the law prior to the amendment will now have to pay taxes and other royalties, no matter what.

According to the Finance Bill 2012, the government has made the following changes to the Section 9 of the Income Tax Act, which will be effective from 1 June, 1976;
1)    it is hereby clarified that the transfer of all or any rights in respect of any right, property or information includes and has always included transfer of all or any right for use or right to use a computer software (including granting of a licence) irrespective of the medium through which such right is transferred.
2)    it is hereby clarified that the royalty includes and has always included consideration in respect of any right, property or information, whether or not—
a)    the possession or control of such right, property or information is with the payer;
b)    such right, property or information is used directly by the payer;
c)    the location of such right, property or information is in India.
3)    it is hereby clarified that the expression ‘process’ includes and shall be deemed to have always included transmission by satellite (including up-linking, amplification, conversion for down-linking of any signal), cable, optic fibre or by any other similar technology, whether or not such process is secret.

What are the implications of this? According to Ameet Patel, tax expert who spoke at Moneylife Foundation’s seminar on the Union Budget, “This is very relevant for foreign software companies, who sell their software in India. Also, the definition has been widened to include transmission of satellites. So, all foreign media and broadcasting companies which are allowing their satellites to be used for viewing various TV channels into your homes and offices are going to be affected.” Why has the government gone back in time is unclear but in one stroke, it has effectively empowered income tax officials to retrieve “missing income”. The officials will now be at liberty to target whichever software and media entity falls under the purview of the amendment.

The government has targeted software, information technology and media firms, by taxing them retrospectively. However, it is funny to note that most Indians did not have televisions or computers, much less cables or fibre optics in those days. In its zeal to discover missing income and unleash harassment of taxpayers, an imperious government has obviously lost all sense of proportions, time and place.

User

COMMENTS

malq

5 years ago

It is common knowledge that the STPI scheme was misused by many entities to juggle expenses and proceeds of huge fiddles pertaining to so-called software exports from India and expenses incurred therein. Looted money flowed out and returned as software income, tax-free in both directions, and this is just one of the scams sought to be caught and taxed retrospectively.

Genuine exporters will probably have nothing to worry about. Likewise genuine importers. But certainly, the scope for harassment remains.

Humbly submitted/vm

K B Patil

5 years ago

This aspect of the budget has been totally ignored by the business channels. Thanks to Moneylife for exposing this buffoonery. Does serving in the government make one float with delusions of grandeur.

dayananda kamath k

5 years ago

retrospective changing of laws were govt has lost judicial scrtiny is nothing but contempt of justice which is greater offence than contempt of court. supreme courtshold intervene and commence contemprt of jstice and contemet of court proceedings against finance minister imeedietly. becasue of tthe political compulsions if the parliament passes the finance bill entire parliament will become party to this offence. this is nothing but misuse of legislative power.what you can expect from a party which has imposed emergency and passed the retrospective law to protect the interest of imposer of emergency. the people of this country may have to think twice before reelcting the the outgoing members of this parliament. they have shown their attitude that they are supreme and can do anything once you elect them during discussion on lokpal bill. they are more concerned with their right than their duty to pass a good law.

PPM

5 years ago

When 1.2 billion Indians can not have a Indian as the head of ruling party, having a person who is worried more about Foreign investors as Prime Minister and a 80 year old person as Finance Minister....what can be expected?

malq

5 years ago

VDIS 1997 was something like this retrospective law, but in reverse, favoured the bad guys. They really did not crib then, did they?

B V KRISHNAN

5 years ago

Ratan Tata made the most appropriate remark on this year's budget: "India is fast slipping into becoming a banana republic.." I would like to add: this govt has already become a bunch of jokers. It is painful to think that we have to endure their performance till 2014.

REPLY

surendra

In Reply to B V KRISHNAN 5 years ago

Very appropriate and befitting.

Sai

5 years ago

Other than the Income Tax related issues relating to retrospective amendment declaring 'Software is Royalty', the 2012 Budget has implications on the Service Tax front too w.r.t the software industry. Already the industry is suffering on account of dual taxes on software from 2008. Some wordings relating to Service Tax on software have been changed in the Guidance Note issued by Tax Research Unit of CBEC after Budget 2012, so once again its time to run back to the offices of Tax Consultants.

Ravindra

5 years ago

Making a Law with retrospective effect is a clear Admission of lack of foresight over the past years and after realising that making the correction with retrospective effect is the Zenith of stupidity.

Sreepathi

5 years ago

How about taxing the East India Co. and British Govt for the income generated during the british raj ?
I think I like this.

REPLY

sanjay doshi

In Reply to Sreepathi 5 years ago

You forgot the Dutch East India company

surendra

5 years ago

It would have been more paying if govt. would have tax birth and death of the people with retrospective date, many of the generations have gone without paying tax.

Prakash

5 years ago

This is most ridiculous. Implication of this seems that anyone, be it a Dealer of a software or even an end user. If he buys a ready made, shrink wrapped software from outside India, he is supposed to be paying 'royalty' and thus withold tax. So, if one buys a software worth $100 and witholds tax on it, thus paying that much less to the seller in say, USA who does not have any PE (permanent establishment) in India. How is that seller going to accept less payment for his product and yet ship the software to the buyer ? Secondly, the software seller may not be even the manufacturer, he may be just a dealer in USA of that software. Why should he accept less payment from any buyer from India ?
Please correct me if I have interpreted it wrongly. If not, then this wins the award for being completely illogical, irrational and senseless.

REPLY

Sai

In Reply to Prakash 5 years ago

Bingo.. you have hit the nail on the head.

Prakash

In Reply to Sai 5 years ago

This effectively means that no one can actually buy a (even a ready made shrink wrapped) foreign software such as even a Anti Virus, or CRM, etc. because no seller (a mfr or a delaer) will accept to the buyer paying cost of software after letting the buyer deduct (or withhold) tax.

TD Sharma

5 years ago

I am afraid, the Govt. and its bureaucrats have really no respect for the principles underlying jurisprudence.

REPLY

Ravindra

In Reply to TD Sharma 5 years ago

Our Government is learning the Chinese ways of business which are despised all over the world. In fact one of the official had the guts to officially state something like "the Chinese do it so why not we?"
And the Govt wonders why the Foreign Direct Investment is not picking up.

Economy & Nation Exclusive
Budget 2012: Glass Half Full or Half Empty?

While the intent of the finance minister may be to boost the revenues so that he can have funds to spend on the social sector, the big question is what will be the impact on the consumers’ pockets?

The Union Budget has become a great annual media event with every channel vying to outdo the other and in the process they leave no stone unturned to score brownie points. Even if the Budget turns out to be a damp squib, channels would make the viewers believe that the most exciting event on the earth has just taken place. So the hungama preceding the Budget 2012 was no different from the previous years, with some channels going to the extent of holding endless discussions for days before the actual presentation of the budget on 16 March 2012. This time the Union Budget was delayed by two weeks due to the intervening elections in several states.
 
One common habit the finance ministers have developed over the years is to give a long speech running over almost two hours. Similarly, it has become a habit with all of us ordinary citizens to expect lots of goodies from the finance minister and then invariably feel let down. Endless discussions in print and television media raise huge hopes making the citizens believe that this time it will be different only to be disappointed by the actual event; the more the things change the more they remain same.
 
Having regard to the manner in which the central government has been wobbling, thanks to its allies, it was too much to expect the finance minister to offer some radical proposals.  The immediate attention the budget draws is to the proposed increase in the rate of excise duty as also the service tax, both being raised to 12% each. While the intent of the finance minister may be to boost the revenues so that he can have funds to spend on the social sector, the big question is what will be the impact on the consumers’ pockets. It requires no rocket science to know that the economy will experience inflationary pressure and taken together with the earlier rise in railway freight rates, consumers are certainly not going to be happy. This effort on the part of the finance minister is expected to mop up almost Rs46,000 crore while he will give away only Rs4,500 crore benefit to the taxpayers.
 
So far as the investors are concerned, a new scheme called “Rajiv Gandhi Equity Savings Scheme” is proposed to be introduced in the ensuing financial year. This is sought to be done with a view to encourage flow of savings in financial instruments and improve the depth of domestic capital market. The scheme would allow for income tax deduction of 50% to new retail investors, who invest up to Rs50,000 directly in equities. To be eligible for the deduction, taxpayer’s annual income should be below Rs10 lakh. The scheme will have a lock-in period of three years. The details of the scheme will be announced in due course. The finance minister will have to clarify what is meant by “new retail investor”; ordinarily it would mean that the existing investors will not be eligible under the scheme.
 
One small benefit that is proposed to be extended to taxpayers is in respect of interest earned from savings account to be deducted from total income. However, the deduction will be restricted to only Rs10,000.  A point to be noted is that the concession is restricted to interest earned only from savings account and not fixed deposit or recurring deposit accounts. This is a needless restriction imposed by the finance minister; instead he should extend this deduction to interest earned from any type of bank account.
 
The concession extended in respect of baggage allowance is tucked away in para 217 of the FM’s speech; the duty free allowance is proposed to be raised to Rs35,000 from the existing Rs25,000.
 
Another important change that will impact the investors is in respect of sale/transfer of immovable property (other than agricultural land). It is proposed to make the concept of TDS (tax deducted at source) applicable and make the buyer/ transferee responsible to deduct an amount equal to 1% of the amount of consideration and deposit the same to the credit of the central government. The registering officer would deny the buyer/ transferee to have the property document registered unless the proof of deduction and deposit of the same is produced to his satisfaction. This will certainly increase the onerous responsibility of the buyer/ transferee. The only exemption granted is in respect of properties with the consideration of below Rs50 lakh in case the immovable property is located in the specified areas or less than Rs25 lakh outside the specified areas.   
 
So far as the overall success of the budget is concerned, much will depend upon the timely implementation of the various infrastructure and social sector projects for which huge amounts have been allocated in the budget and effective control of leakages.

(Dr SD Israni, advocate & partner, SD Israni Law Chambers, is one of India’s leading authority on corporate, commercial and securities laws. He was a member of the Naresh Chandra Committee for simplification of Company Law relating to private and small companies. He has been on SEBI's committee on disclosures (called the Malegam Committee) and the one on buy-back of shares. Dr Israni has been a member of the Legal Affairs Committee of the Bombay Chamber of Commerce and Industry, Indian Merchants' Chamber and Indian Council of Arbitration. Dr Israni is an active member of the Institute of Company Secretaries of India and was on its Central Council for four terms and headed the Capital Markets Committee of the ICSI.)

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