FAIITA (Federation of AII India Information Technology Associations) recently raised concern arising from different tax slabs for various IT components, accessories, Networking equipment and spares with a request letter to Ravi Shankar Prasad, Minister for communications & Information Technology.
FAIITA in the letter showed concern over GST Slab varying from 18 to 28% for IT & ITES Products and mentioned some submissions to rationalize the same.
Submissions to rationalize GST’ Slab for all IT Products included:
- A typical contemporary deployment of IT solution comprises of Networked Notebook computer having battery and charger, Desktop computer containing CPU, Monitor, Keyboard, Mouse, Printer, Printers MFD (Multifunction Device with printing and scanning, capability;
- Multifunction Printers having Printing and Scanning capability (HSN code 84433100) with current duty of 17.5% (12.5% and 5% excise duty and VAT respectively) is saddled at 28% GST stab. Ironically, single functionality Scanners and Printers are saddled at 18% GST. In light of foregoing fact, placing Multifunction Printers in 28% slab is misplaced and deserves to be revised to 18%.
Furthermore as per consumer preference, Multifunction printer sales tart up to 90% of the total Printer sales in the country;
- Computer Monitors (HSN code 85285100 irrespective of size) are under current tax structure of 17.5% (12.5% and 5% , ED and VAT respectively), while GST has been staggered size wise, with screen size measuring up to 17” (inches) saddled at 18% while screen size above 17” (inches) is 28% Notably only screen sizes above 17″ are maximum selling as per customer preference. Admittedly, Monitors are essential and integral part of a computing deployment;
- It is noteworthy that a typical IT deployment in GST will invite Billing of Bare Desktop computer @18%, Monitors @28% (currently @17.5%) and Multifunction printers @28% (Currently @17 .5%), Networking equipment @28% (currently @17.5 %). Hence increasing the cost of IT in GST;
- Notebook Book computers as a product is saddled at GST @18% while standalone Notebook battery and charger is saddled @28%(currently attracting 17 .5 %);
- IT deployments have graduated to networked environment, for information sharing and collaborative working. These days there is no IT infrastructure in isolation and use of data cables, connectors network switches etc. is essential. Notably from current 17.5%
(12.5% ED and 5% Vat respectively) the tax incidence will increase to 29% in GST.
- It is evident that even success of GST will largely depend on presence of seamless IT infrastructure notwithstanding other initiatives of Government of India around “Digital India”. Factually, any IT infrastructure deployment requires integration of various IT products. A varying duty will not only add to confusion but will also encourage manipulative avoidance; and
Further the letter included request for one GST slab of 18% for all IT products to simplify IT project implementations and avoid misrepresentation.
FAIITA, the registered national umbrella body over all state IT Federations/ associations represents direct business interests of its 30,000 (thirty thousand) pan India member-business organizations.