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 user 2009-07-14 at 11:22:55 am Views: 60
  • #22827
    state government has asked the dealers who were billing ink cartridges
    and toners under four percent VAT to pay 12.5 percent VAT for all those
    products that have been sold from 2007

    INDIA: The random raids conducted by VAT officials have put channel
    partners in Tamil Nadu dealing with consumables in a spot.Tamil Nadu
    state government has asked the dealers who were billing ink cartridges
    and toners under four percent VAT to pay 12.5 percent VAT for all those
    products that have been sold from 2007.Several dealers have been
    affected because of this sudden notice from the VAT department, as the
    dealers have been billing toners and ink cartridges at only four
    percent VAT. The channel claims that their vendors and distributors had
    instructed them to bill the consumables at four percent and never
    informed them about the state government’s clarification of paying 12.5
    percent on consumables.

    A notice has been served to
    Madurai-based Sunvin Computers and few other channel partners in
    Chennai to pay 12.5 percent of VAT for all those ink cartridges and
    toners sold from 2007 to till date.J Vincent, Proprietor, Sunvin
    Computers, Madurai said, “We have been billing consumables on the basis
    of four percent VAT and also getting the same from the distributors and
    suddenly the commercial tax department has slapped a fine of seven lakh
    and is asking us to pay12.5 percent VAT for all those products that we
    sold in the past two years, which might go to several crore. Moreover,
    the customers also will not accept the sudden price hike.”

    also added that there was no proper communication from the state
    government and consumables carry only four percent VAT according to VAT
    Act. “The state government has mentioned that all computer and
    computer-related peripherals attract only four percent VAT, and printer
    and consumables are computer-related peripherals due to their
    dependency on computers alone. So these products attract four percent
    VAT, and if at all the products attract 12.5 percent VAT, then the
    vendors or the distributors need to bear the cost as they were the ones
    who billed the product without clarity at four percent.”Even Uttam
    Chand, CEO, Uttam Marketing, Chennai claimed that it is the vendors’
    and distributors’ responsibility to pay the extra VAT specified by the
    commercial taxes department. “This confusion has been there for almost
    two years and we have been communicating this fact to vendors and they
    in turn were saying that they will safeguard us if we face any problem.
    However, nobody is coming to support us or put a stay against the
    notice issued by the state government,” he said.

    A major office
    automation dealer, who has been served notice by the sales tax
    department informed that a case has been filed challenging the notice.
    “We have been billing the products at four percent from the disti and
    suddenly we were served a notice by the sales tax department to pay a
    difference of 8.5 percent. We have circulated the notice to the vendors
    as well as the distributors and they are yet to come to us with any
    reply.Meanwhile we have filed a case in the court challenging the
    notice and will fight with the evidence we have,” informed the dealer
    on the condition of anonymity.Confed-ITA has also taken up the issue
    and written to all vendors and distributors asking for clarification.
    Vinod Kumar, Treasurer, Confed-ITA, is spearheading the issue with the
    vendors and distributors.”We have written to all the vendors as well as
    the distributors and are waiting for their reply. This is going to be a
    serious issue for all in the channel community as they have to pay a
    huge amount that might lead to several crores. The vendors and the
    distributors have to take up the responsibility and bail out the
    channel from this crisis,” said Kumar.

    On the other hand, PN
    Prasad, President, Confed-ITA claimed that 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.
    “Despite getting the order from the state government of Tamil Nadu,
    MAIT has not shared this with channels and this is a serious case of
    violation. Every time vendors take the channel for a ride and this is
    yet another example of that,” claimed Prasad.When contacted Vinnie
    Mehta, Executive Director, MAIT said that the association communicates
    any information it has to its members. “We circulate any information
    through our members as our mode of communication is very limited within
    our members only. In any kind of sensitive subjects like taxation, we
    presume that our members take it to the right people and communicate it
    with proper measures and advice to their respective channel community,”
    he said.He also informed that he will look into this particular issue
    and check it with the members of MAIT.