The Directorate of Revenue Intelligence (DRI) has arrested Sunil Dalal, Founder and Director of Softcell Technologies. The DRI alleged that Softcell imported embedded software from Microsoft Singapore in the form of CDs and DVDs and it paid customs duty only for the software which was present in CD format. It claimed that this tax was just five percent of the value of the software shipment, while the tax for software imported in the form of paper licences was unpaid.

But D Venkatesh, Director of Softcell revealed that for the past 18 months, the Custom's Special Investigation and Intelligence Bureau has been interrogating them and had sent them a notice from customs around March 2007. He added that the actual dispute is on the confusion of applicability of additional duty (equal to Central Excise duty) on the combined value of licence and media, especially when licence is classified under CTH 49 07 at zero duty and software on media under CTH 85 24 at 8.24 percent CVD for the period under investigation (today this CVD is 12.36 percent).

He continued, "We never refused to pay the duty, but we asked the DRI to give us a demand notice or a showcause notice, which clearly stated how much duty was to be paid. Till date we did not receive it and despite that Dalal was arrested which is unfair, dastardly and vindictive."

Needless to say, this news came as a shock to the channel community and they fear that similar instance can have a debilitating effect on the software business in the country.

For more details read The DQ Week, Sep 22-28 issue

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