VCMDWA to file PIL against double taxation

Nagpur

July 31, 2008

The Vidarbha Computer Manufacturers and Dealers Welfare Association (VCMDWA)
plans to file a Public Interest Litigation (PIL) in the Supreme Court (SC)
against the government's double taxation policy on software. Prashant Ugemuge,
President of VCMDWA said, “The government has levied double taxation on
software. The first is value-added tax (VAT) and then we have to shell out for
service tax (ST). Paying two types of tax is becoming difficult for
end-customers and our dealers.”

He gave the instance of selling software like Windows, where a dealer has to
pay four percent VAT and 12 percent service tax. “Besides this, customers also
deduct 12 percent as tax deducted at source (TDS). The TDS can be retrieved from
the government, but it often takes a couple of years to get it back during that
time, the dealer's working capital is blocked. This is why the association has
decided to take this extreme step of filing a PIL,” he added.

According to market sources, two types of tax on the same product are
unconstitutional. Ugemuge said, "The SC has declared that there should not
be double taxation on single product, which justifies our fight."

“This fight is to protect the interest of customers as well as dealers.
According to our legal experts, we have all the grounds to file a PIL in court.
We are hopeful that the judiciary will take this matter into consideration and
bring a stay order on double taxation policy of the government or allow for a
single tax system,” added Hitesh Parikh, VP, VCMDWA.

VCMDWA hopes that other channel associations across the country also join it
in this fight. Ugemuge said, “This initiative may not be a big success without
the participation of other people from the country.”

Meanwhile, the association had organized a blood donation camp and free
medical health check up for its members and their family last week. Nearly 170
people participated in the camp and 67 people donated blood.

VCMDWA is also organizing a fun-filled event on August 8, 2008 for its
members and their families on being voted as one of the best associations in
India by The DQ Channels. Singer Penaz Masaani has been invited as the chief
guest for the evening.