Hike In VAT Irks Bhopal Dealers

The ongoing DQ Week IT Panchayat series made a stop in the heart of India,
Bhopal last week.

The event, which saw participation by 65 channel partners from the city, saw
some serious concerns being raised by the partners.

The evening started with presentation by Sify, Busy Software and Delta
Peripherals, wherein they informed the gathered partners about the benefits they
could derive from associating with them. Post the business 'gyan', it was time
to discuss the issues that the partners have been facing of late in the city.

Discussing the recent hike of one percent on VAT in the state, Amitendra
Shrivastava of Coral Business System said, "The one percent hike in VAT has
really pinched the IT resellers. We are the only state which has a higher VAT
rate than the others. With the market conditions being what they are, the
additional tax hike will definitely put a burden on business and make it very
difficult for us."

Another major problem that the partners in the city are facing is the
regional distributor attitude of the representatives of the national
distributors. Shedding light on their problem, Bhupender Gaur of Latest
Information Technology said, "The representatives of national distributors are
billing to the RD and also the channel partners in the city. So, an RD finds it
very difficult to work in these circumstances."

Reacting to the statement, Rahul Haksar of Ingram Micro said, "It is not
really true. We are committed to our regional distributors and we do equal
business with them. We only do business with the dealers registered with us. So
the allegation does not hold base."

Questioning Haksar, Gaur asked, "What is the criteria for getting
registration? Anyone who has one day opened a shop can get registered with you
and start doing business." Answering the same, Haksar said, "Any new dealer
needs to fill-in a form with us, and only when they get registered with us do we
do billing with them."

Ashish Jain of Sam Systems replying to a query during the discussion	First row L-R, Narendra Motwani of Logon Computers and Bhupender Gaur of Latest Information Technology, second row R-L Rahil Haksar of Ingram Micro and Faraz Ahmed of Compuage Infocom

Faraz Ahmed of Compuage Infocom said, "We follow the same policy and it takes
a day or two for the dealer to get registered with the national distributor."

Taking his stance one step further, Gaur said, "They have no checks on
anyone. This practice leads to undercutting in the business, as these new guys
are not in the business for long term. They come set-up shops and sell goods at
a less price than MOP, which spoils the market for us. Plus, with the funds that
they get from selling these goods, they buy from local channel partners and then
one day shut their shops and disappear."

Giving a suggestion on how the situation can have an amicable resolution,
Shrivastava of Coral Business System said, "The association has always been
supporting the distributors here and we always help if some partner in the city
does not pay up their dues. We suggest that the distributors should only do
business with partners who are registered with the association. This may resolve
the undercutting problem, make sure that partners follow ethical business
practices and also that no one in the market makes any losses."

Both Haksar of Ingram and Ahmed of Compage agreed that this was a workable
solution and that they would forward it to their respective branch heads for
approval. Veering towards the tie-up that the local association Bhoj Information
Technology and Office Automation Association (BITOAA) had with Confed and
advantages of the same, Ashish Jain of Sam Systems and the coordinator of BITOAA,
who was working with Confed said, "The association with Confed has not yielded
great results for us. The problem that we faced was that Confed is too regional
and involved with activities in Tamil Nadu only. They do not think beyond their
state. That is the reason why we have a disconnect with them."

Shivangi Yadav

shivangiy@cybermedia.co.in