ISODA seeks clarification from government

The newly formed Indian Software Dealers Association (ISODA) is approaching various government agencies to seek a clarification about the imposition of double taxation on software products. Devesh Agarwal, President of ISODA said, “We are seeking opinions from the sales and service tax department to understand why this tax has been imposed. Once we get the information, we will consider what legal steps need to be taken to sort out the issue.”

ISODA officials have also met with the commissioners of the tax department in the four regions for discussions on this issue. They have also suggested the appropriate tax format to be implied on standard software sales.

Agarwal added, “The double taxation is affecting our business as TDS will be deducted by customers before they send us the payment. Then we have to pay an additional sales tax as well, which means we have little or no margin to do business in the end.”

When some software sellers started selling the products at a higher price, enterprise customers asked for a justification for this hike and often prefer to defer the purchase of the software.
Besides lobbying with government agencies, the ISODA's executive councils have asked vendor companies to provide a written document giving their viewpoint on the issue of double taxation on the single software product. “This will be help to clear the doubts in the minds of ours customers,” Agarwal noted.

ISODA flagged off a two-day association meeting to address this and other issues yesterday. Prabhakar Kini, VP of ISODA said, “Our association is different from other associations on the ground that our members are from the same business domain — of software. Every member's problem will be a problem of the association. So it will become easy for us to discuss the current problems and find solutions for them.”

At the event, ISODA drew its road map for the year and distributed a white paper which touched upon the various issues that need to be tackled in future. It has also created a blog where members can log in register their queries.

At present ISODA has 100 members. Regional meetings will be held regularly, results of which will be circulated to all members.