Excise raid on 11 Ahmedabad resellers

Last month, there was an excise raid conducted on 11 Ahmedabad based
resellers by the excise department, due to avoidance of excise duty payable for
assembled systems and service tax. These resellers are members of Ahmedabad
Computer Manu-facturers Asso-ciation (ACMA). On contacting Naishadh Diwanji,
President, ACMA and Director, Pace Computer Consul-tants, he said, "ACMA
does not support partners avoiding taxes, as law would take its own course. On
service tax, however, the association believes that this tax is not applicable
on repairs of computers and peripherals. ACMA along with GCCI (Gujarat Chamber
of Commerce and Ind-ustry) has protested and the GCCI President has written a
letter to the Excise Commissio-ner. 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 meet-ing, various aspects of excise duty were discussed. An excise
consultant from Ahmedabad was invited to share his opin-ions and answer member
queries. Said Sanjay Tayal, General Secretary, ACMA, who was present at the
occasion, "Such events must be organi-zed 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