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VAT department demands 12.5% VAT on MFP sales

All Delhi Computers Traders Association (ADCTA) has started seeking distributors and vendors attention towards the sale of MFPs

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Sandhya
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Recently officers from the Department of Trade and Taxes conducted audit of books and accounts of few traders in Nehru Place market and decided that multi-functional printers shall attract a VAT@12.5% from now onwards. This will also be applicable for the MFPs sold since 2007. There is also news that, in a few days, all MFP resellers across the country will receive similar notices.

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This is the biggest issue to hit channels in the country, and it has come at the wrong time because markets are struggling in the wake of recession. Hence, to protect partners, in this wee hours, Delhi based All Delhi Computers Traders Association (ADCTA) has started seeking distributors and vendors attention towards the sale of MFPs wherein currently the MFP output VAT@5% is charged and accordingly retailers/dealers are charging from their customers

Speaking on this issue Mahinder Aggarwal, president, ADCTA said, "Now being a principal company, distributor or supplier, it is their duty to protect their dealers from this extra burden because all dealers are selling and claiming an input VAT @ 5% according to sale invoices pertaining to MFPs."

The association is asking the principal company/distributor or supplier to issue an output VAT @ 12.5% on MFPs on all sales invoices henceforth, so that dealers can also claim input VAT @ 12.5%. In case sale invoice of MFP from the vendor company is issued with an output VAT @ 5% then it must have an undertaking to compensate the dealers from legal issues and demand, if occurred on account of VAT @ 12.5% on MFP sales.

Aggarwal also added, "Acting on written complaints received from our partners, we have sent letters to distributors like Ingram Micro, Redington, Neoteric and also sending to MFP vendors to clear this confusion and protect their partners and waiting for their revert."

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