Working its way towards protecting the interests of channel community, Progressive Channels Association of Information Technology (PCAIT) has successfully pushed the government to bring down the VAT slab on UTP Cables and Patch Cords to 4%. Earlier it was 12.5 per cent.

With this circular being issued by the department of trade and taxes–the VAT on UTP cable, patch cords, fiber cable, telephone cables and even computer cables now stand at 4%. 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 sometime for the changes to actually happen, but we have conveyed this message to our members as well as the concerned distributors. We are hopeful of a positive response from them,” informed, Rajiv Kumar, Director, Proactive Data Systems and part of the PCAIT team responsible for handling issues like this.

With an to become an industry voice for the channel community – PCAIT started working on the 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 on 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 such issues and work towards solving them,” informed, RK Malhotra, President at PCAIT.

It is its close proximity to the seat of governance and a will to act in a united way that is acting as a catalyst for PCAIT 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 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

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