What a Big Idea Sirji!

It is much
easier to say that solution providers look at profits only. However,
the de facto is that solution providers face several issues,
which challenge their growth everyday. While on one side, state and
central governments are competing against each other on finding new
ways to burden the channel partners with new acronyms of taxes, on
the other side, some vendors are poaching the employees of these
partners. This resulted into the shrinking of margins for channel
partners.

Whatever be
the case, partners from New Delhi to Coimbatore have their own
concerns, which they are sidelining for a consistent growth. href="http://www.dqweek.com/Futuresoft-Solutions-bags-ISODA-MP-Kini-National-Award">Infotech
Software
Dealers Association (ISODA), an amalgamation of companies
engaged in the business of reselling of packaged software products in
India, recently conducted its second annual tech summit at Singapore
to stage all those issues faced by them.

THE NEXT
BIG IDEA

Much alike
the title, 'The Next Big Idea,' the event paved the way for
participants. It led them to think and re-think on not to follow the
age-old methodologies, which may not suit 'Green' in the
fast-changing scenario.

On
organizing
such an event, Sudarshan Ranganathan, VP, ISODA says, “There are
multiple needs and factors which triggered us to conduct such a
summit. It is an event to collaborate, coordinate, build
relationships, and understand the capabilities of other partners
across the country. It gives a network to discuss strategies, issues,
resolutions, avenues for growth between partners as well as to build
in capital and reserves in the association to build a more strategic
future for the community.” Speaking on the responses of the event,
he says, “The responses and sponsorship for the event was
fantastic. Vendors from cloud servicing, authentication and web
security, availability back-up and endpoint protection, perimeter
security and threat prevention have sponsored the event.”

BIG
CHALLENGES AHEAD

Years
before,
the word cloud was not so popular, but today, the scenario has
changed completely where cloud is a boon for few and a bane for
others. Even though, there may be a wide range of issues faced by
partners, the top three prioritized are the taxation, managing the
cashflow and shrinking margins. Harinder Salwan, director, Tricom
Multimedia explains the emerging issues, “There are some
region-specific issues existing in every nook and corner of the
country which are being overlooked by quite a few partners. All these
issues pertain to the taxation in various states on software and also
to freight that is being charged by the distributors.” He further
adds, “In states like Delhi service tax and VAT is being charged on
basic price and freight is exempt from taxation.

In states
like Maharashtra service tax is first charged on basic price and VAT
is charged on the total of the two (Basic Price + Service Tax) and
also VAT is charged on the freight component.” “Similar issues
are prevailing in other states also in the country, and hence a
partner operating in multiple states has to maintain separate
accounting heads and use different methods of taxation and
accordingly if he is supplying to another state where the taxation is
different, it adds to a lot of clarifications to be provided which is
time consuming,” Salwan concludes.

SO, WHAT
IS THE SOLUTION?

The next
'BIG
IDEA' for partners is to work together using resources of each
other and complimenting each other. They should stop discounting
prices to bag orders and provide an efficient and ethical method of
dealing with vendors, customers and partners for the betterment of
the industry. Also there are quite a lot of problems faced by
partners in tier-2 and -3 towns. There are quite a few issues faced
by small partners in tier-2 and -3 cities like update on the problems
and challenges being faced by the community, what are their statutory
obligations and responsibilities. There are many partners from such
cities who are not aware that they need to deduct TDS on payment of
invoices where there is service tax charged in the invoice at a rate
which is dependent on the nature of the service and varies from 1% to
10%. During the recent ISODA Tech Summit, what surprised me was the
ignorance of partners trading in packaged software that they are
liable to deduct TDS at 10% under section 194J on all invoices of
computer software where service tax is charged by the vendor.
Distributors also share that not many partners in these cities deduct
TDS and some few even in tier-1 cities are ignorant of the rules of
the land on the taxation front.

Salwan also
suggests that the role of media is inevitable to take up the issue
and bring it to the knowledge of the community in such cities before
it is too late, and when they receive demand notices from the
department they will have no option other than shut shop as the
penalty would be manifold.

ISODA
INVITES

There are
many partners across the country showing interest to face the issue.
ISODA also invites partners across the country to join hands together
to address the issue. Sudarshan asks the non-ISODA members who want
to join them to visit www.isoda.in and get to the member section and
register as a new member. “Once acknowledged and after getting
referred by two existing members, a solution provider can become a
member of the association and the registration fees and annual fees
have to be paid as per his membership,” Sudarshan concludes.