J&K VAT issue gets resolved

The ongoing VAT issue in Jammu and Kashmir has finally got resolved. The government of J&K, finance department, Civil Secretariat has issued a fresh SRO 329, in which the government has amended the Value Added Tax Act 2005. As per the latest notification, all IT products and peripherals will attract 0% and 5% VAT, which was earlier increased from 5% to 13.5% due to the repercussions arising out of SRO 108 and 122 by finance department. The new notification will be effective from October 9, 2012.

The products/items which will fall under Schedule 10-A and shall be applicable to attract 0% and 5% VAT are desktops, laptop and palm top computers, computer peripherals .

The new notification has spread a wave of celebration in the entire valley. According to jubilant Arvind Koul, president, Jammu Computer Dealers Association (JCDA), "It is a celebration time for all the Jammu and Srinagar dealers. It is a great achievement as the SRO originated by the finance department would never have been amended, seeing the past record and the pace of these departments. Now all the IT related products will fall under 0% and 5% VAT, as it is being implemented in other neighboring states like Punjab and Delhi."

Naveen Gupta, joint secretary, JCDA further added, "After the final draft passed by the law department in the month of September, all IT dealers were expecting this amendment to come out. This outcome is an effort put in by our association and some dealers of Srinagar. They need a big pat on their back."

It is to be noted that ever since the finance department increased the VAT from 5% to 13.5% on IT products in the month of April, JCDA started protesting against this move and forced partners to sell their material by issuing challan to customers, in place of invoices or billing, as there was no clarity on this matter till date. The entire business of the traders came down by 80%. All this while, even the IT companies were not ready to assure dealers for covering up any loss which may arise out of difference in VAT rate.

Gupta also informed, "We are holding our general body meeting on October 13 to celebrate this big victory. Moreover, we will be announcing our election date, which is scheduled to be held in the month of December."