INDIA : SAMSUNG ORDERED TO LOWER TAX RATE FOR CARTRIDGES

[Anonymous]

http://www.ciol.com/Channel-News/News-Reports/Samsung-printers-cartridges-get-stay-order-on-12.5-p.c-VAT/191009126485/0/
INDIA : SAMSUNG ORDERED TO LOWER TAX
RATE FOR CARTRIDGES
The company’s
printer division obtained the order for all its distributors across
Tamil Nadu
CHENNAI, INDIA: Earlier this month, the High Court of
Madras issued an interim injunction to Samsung India Electronics and its
distributors in Tamil Nadu against levying value-added tax (VAT) higher
than four percent on printer toners and cartridges.In its plea seeking
interim injunction, Samsung (Printer Division) had included its
distributors—Carewel Systems (Vellore), Vijex & Company (Chennai),
Sukkra Traders (Puducherry), Micro Automation Info India (Tirupur),
Vijex Office Product (Coimbatore), Vinay Agencies (Erode), Uttam
Marketing (Chennai) and Micro Machines (Salem) as petitioners.

The
judgment of Honorable Justice V Ramasubramanian restrains the
appropriate authorities from recovering tax with respect to sale of
printer toners/cartridges at a rate higher than four percent tax.The
order is applicable to all the petitioners. All the partners The DQ Week
contacted hailed Samsung’s support in this issue. R Krishnamoorthi, MD
of Tiruppur-based Micro Automation Info India enthused, “Samsung stood
by its words, and we are very thankful to the company for its committed
support.”On a similar note, Rajesh Kumar, Proprietor of Erode-based
Vinay Agencies said, “Samsung always supports its partners and will not
let them down. We will be united and face the VAT issue together.”
Saravanan, CEO, Carewel Systems, Vellore, expressing relief shared that
they were happy and content to be part of Samsung family.

The
Tamil Nadu VAT Act—Schedule 1, Part B states that toners and cartridges
are excluded from the four percent tax. Citing the act, the appropriate
authorities claim that the product thus attracts 12.5 percent tax.
However, all the partners across Tamil Nadu have been levying four
percent tax on toners and cartridges. The department has been issuing
notices to several partners across Tamil Nadu to pay 12.5 percent of VAT
on all those ink cartridges and toners sold from 2007 till date.In this
regard, Canon had obtained an interim injunction in Madras High Court
in February 2008. Earlier, Manufacturers Association for IT (MAIT) had
been updated by the state government of Tamil Nadu in 2007, that the ink
cartridges and toners attract a VAT of 12.5 percent. But, this was
allegedly not communicated to the channel partners. It was viewed as a
serious case of violation by Confed-ITA.

[Author]

November 10, 2009 at 10:41 AM