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
Mumbai