-B Swaminathan

Mumbai, May 5: The new notification from the Government of India on the new duty structure is likely to negatively impact the partners and could also lead to increased IT hardware price.

The new notification from the Tax research unit from the Revenue Department says that the concessional excise duty (and hence, CVD) of 6% on Hard disk, CD ROM drive, DVD drive or writer, Combo drive, flash memory, microprocessors has been restricted only to actual users for manufacture of computer (PCs/desktops).

This also means that the dealers and system integrators will be in a fix. The associations across the country are planning to take the issue with the central government.

With this duty structure in place, partners feel that the price of memory products will increase

Above all, it is observed that in future the benefits of excise duty will get restricted to the manufacturers of computers like Dell, HP, Lenovo in India.

In India procurement of the hardware components through other modes like Channels, System Integrators is always high. The components used through this mode are being used for various functional requirement of the customers. As this channel will not be benefited in future their input cost of the Hardware component cost will be higher. This will lead to incompetence of channels to do effective business. Already channels have been evolving business challenges and this will affect the channel business to a larger extent.

TAIT (Traders IT Association of Information Technology) feels the government notification has overlooked the interest of lakhs of the Indian IT channel business ecosystem of distributors, sub distributors, channel partner, system integrators.

This is one more example of non-level playing field for the IT channel business. “We at TAIT feel that the Government of India’s understanding for continuing the tax structure benefits for the manufacturers of computers is not inclusive. TAIT will express its its views with the Government of India.TAIT feels that as this will affect the channel community across the nation the FAIITA, national federations of IT associations of India should put forward its representation to the Government of India”, said K R Chaube, president of the association.