PCAIT efforts bring VAT slab on cables down

The association is also working towards addressing similar issues with
products in the router and switc h category as well

Working its way to-wards protecting the interest of channel community —
PCAIT the Progressive Channels Association of Information Technology has
successfully pushed the government to bring down the VAT slab on UTP cables and
patch cords to four percent where earlier it was 12.5 percent.

With this circular being issued by the department of trade and taxes — the
VAT on UTP cable, patch cords, fibre cable, telephone cables and even computer
cables now stand at four percent. This is likely to reduce the cost of these
components and the distributors are also likely to act accordingly.

"It is a big win for the association and the overall channel community
of this region. The government has just issued a circular on this front, so it
will take some time for the changes to actually happen, but we have conveyed
this message to our members as well as concerned distributors. We are hopeful of
a positive response from them," informed, Rajiv Kumar, Director, Proactive
Data Systems Pvt Ltd, a member of the PCAIT team responsible for handling issues
like tax.

With an aim to become an industry voice for the channel community — PCAIT
started working on issues related to tax structure and got in touch with Delhi
government as well as the empowering committee for VAT. More importantly, PCAIT's
strategy to work in a focused manner has paid well.

"PCAIT has specific members working for specific areas. This approach
has helped us streamline the activities of the association, as a result we are
in a better position to address issues like this one," he added.

It is interesting to note that sales tax personnel do not have a 'harmonized
systems nomenclature' (HSN) for deciding the tax structure of goods and this
causes most of the problems for the trading community. However, the same HSN is
closely followed by the customs department.

With more and more people coming forward to highlight issues with the
taxation of IT products - this is slowly going to change. "One good thing
for the industry is that the government is now opening up on these issues. Now,
as we bring these type of issues to the fore, we are likely to see this
nomenclature being followed in part by the sales tax personnel," he
explained.

While this issue has been addressed — it is just the beginning as the
association is already working towards similar issues for products like routers
and switches as well. "We are acting as an industry voice. So if there are
concerned people with such issues, we would continue to highlight and work
towards solving them," informed RK Malhotra, President, PCAIT.

PCAITs close proximity to the seat of governance and its will to act in a
united way has acted as a catalyst for the association to push these issues
forward. The association is positive that these issues once adopted in Delhi on
the regional front — would afterwards be promptly taken up by other states and
regions as well.

"This kind of positive response from the government side is quite
encouraging to us as an association. We only hope that this decision will be
replicated to other states of the country as well," Rajiv added.

Zia Askari

New Delhi