Software dealers demand CENVAT benefits

New Delhi: When the central government declared that CENVAT on IT
products would be reduced by four percent, dealers anticipated that the decision
would help improve the market performance, which has been slow due to economic
recession. However, a week after the government's decision, distributors like
Ingram Micro and Redington are still taking advantage of imported software and
the modified excise duty is not being applied on them. Indian Software Dealers
Association (ISODA) members informed that distributors have not yet reduced the
prices on products from Tally, Adobe and Symantec. The reduction was implemented
on Microsoft licenses four to five days after the government's declaration.

Protesting the monopolistic attitude of distributors like Redington and
Ingram Micro, and in order to make them realize the strength of ISODA, members
have decided to call for a 'no transaction day' on Dec 22, informed Harinder
Singh Salwan, Secretary, ISODA. Hemant Chabria, Secretary, ISODA informed that
dealers were protesting the fact that distis are taking advantage of the
situation by selling the products at higher rates, even after the government's
announcement.

Salwan informed that on Dec 22, all the 100 members of ISODA will protest and
no billing, payment, supply or transaction will take place on that day. "We want
to let our distributors realize that ISODA is a strong association and they
cannot run business according to their own will," he said.

Explaining the cause of the protest, an ISODA member shared that the
association had directly interacted with top officials of Redington and Ingram
Micro over the issue of reducing the excise duty by four percent and the distis
had agreed with them. However, when the software dealers conveyed the message to
an executive of one of the distributors, with whom the billing was conducted, at
the time of purchase he refused to acknowledge the reduced rates, saying that
ISODA is not a recognized body and cannot play any role in modifying the
distributor's decision.

Commenting on the issue, Sudarsan Ranganathan, Regional Secretary-South,
ISODA said, "We had a discussion with the distributors on CENVAT and want a
clean process to be followed on that front. Since there has been a decrease of
four percent, the benefit needs to be passed on to the partners rather. This
reduction must come to effect from the day of announcement. On the other hand we
are also talking to the vendors, as the distributors haven't come out with a
statement. We don't want to create an antagonistic situation with anyone, but
actions like 'no transaction' is our last resort which we will take to show our
unity and solidarity."