Excise raid on 11 Ahmedabad resellers

DQW Bureau
15 May 2004


Last month, there was an excise raid conducted on 11 Ahmedabad based

resellers by the excise depart-ment, due to avoidance of excise duty payable for

assem-bled systems and service tax. These resellers are members of Ahmedabad

Computer Manu-facturers Association (ACMA). On contacting Naishadh Diwanji,

President, ACMA and Director, Pace Computer Con-sultants, he said, "ACMA

does not support partners avoiding taxes, as law would take its own course. On

service tax, how-ever, the association believes that this tax is not applicable

on repairs of computers and peripherals. ACMA along with GCCI (Gujarat Chamber

of Com-merce and Industry) has pro-tested and the GCCI President has written a

letter to the Excise Commissioner. This would most probably be agreed upon as

service tax is not applicable to our kind of business."

In fact, the association also organized a discussion for the ACMA members. At

the meeting, various aspects of excise duty were discussed. An excise consultant

from Ahmedabad was invited to share his opinions and ans-wer member queries.

Said Sanjay Tayal, General Secre-tary, ACMA, who was present at the occasion,

"Such events must be organized more on a larger scale even by other

associations, as members must be updated on these government rules. I do not

want to comment on the members being raided, as they have to still be proved

guilty. Excise authorities have come and checked all the documents and now, show

cause notices have to be issued."

Channel partners are also of the opinion that customers are often responsible

for such kind of raids. Dealers do not include excise duties on their billing

and thus fall into trouble. Partners also avoid making bills on the complete

system but prefer billing on components. In fact, one Mumbai channel partner who

did not wish to be named, said, "Companies also go to the extent of billing

and showing their worth below Rs 1 crore to avoid taxation. Channel partners

must be educated about the legal system regularly or they should update

themselves on their own."

Nancy Sudheer