Channel partners want national association

Kolkata: During The DQ Week Disti Summit held recently at Vedic Village, Kolkata, S Karthikeyan, former President and Advisor, Confed-ITA spoke about the need to come together to form a national body to address larger issues at hand. One of the advantages of forming such a body was that they would be able to address tax issues affecting channel partners across the country. In this regard Karthikeyan presented a case study of the ongoing service tax and VAT conflict in South India.

Shedding light on the situation, Karthikeyan said, “We need to take a call on the present taxation policies of the government. Recently, in a single day in South about 28 dealers received letters from tax authorities demanding service tax since 2004 and VAT since inception, coupled with fines. We communicated the matter to the vendors but did not receive a single feedback over the same. It was then that we felt the need for a strong and dominant body to address our interests over these kinds of redresses.”

A discussion regarding safeguarding against unwanted service taxes and VAT arose among the audience, thereby a call was made to unite under a common platform to protect channel interests.

Taking stock of the situation, PK Sinha, Spokesperson, Bihar IT Association (BITA) said, “After going through the case of the sales tax and the VAT policy, I feel that it is high time associations across the country unite to voice a common opinion and preserve our interests in this trade.”

Appreciating the move, Karthikeyan immediately appealed to the audience to unite under a common platform and the enthusiastic audience resolved to take up an initiative in this regard.

Explaining the course of action in this aspect, Karthikeyan added, “Confed-ITA has formed a special committee called Service Tax Task Force to fight the service tax issues that partners across the country are currently facing. The committee will take care of the service tax issues by taking up the matter with the concerned authorities and will find a solution. The committee is open to all channel partners across the country affected by the service tax issue, and those who fear that they might be a victim of it. About 20 members have already joined the committee. While the deadline given to vendors to get back to Confed-ITA with clarity on the Service Tax being levied on partners' backend payments came to an end, and reminders were sent over the same, we decided to impose ban on the vendors which yielded prolific results.”

Confed-ITA has already communicated the need to form of a national IT association to most major IT associations across the country as pressure over backend incentives has started to mount from the Central Excise Department.

In this aspect, Delhi-based Computer Media Dealers Association (CMDA) has already filed an appeal for notices with the VAT department and also taken up the issue with Maunfacturers' Association for IT (MAIT). Also, sources in Indian Software Dealers Association (ISODA), a national association of software dealers, shared that the association is planning to file a legal petition in Chennai Court seeking clarification over the dominant tax structures, like double taxation on software and service tax on back-end incentives from vendors.

The desire to have a national IT association is surely gaining monentum, with one member in the audience at the Summit taking the liberty of christening it 'Confed India'.