Delhi HC Rules 4% VAT on Select IT Products

Delhi HC Rules 4% VAT on Select IT Products

Giving a breather to the channels, the Delhi High Court has ruled that the products debated under Value Added Tax (VAT) will be taxed at 4%, the national capital-based Computers and Media Dealers Association (CMDA) has claimed.

In an e-mail communiqu with ChannelTimes, the association said that the tax under Section 4(i)(b) of the DVAT Act for products like - ink toners and cartridges used for the inkjet and the laser jet printers will be 4% and not higher as contested by the Commissioner of Trade and Taxes.

"The honorable High Court has upheld the ruling of the tribunal, which was in favor of our association in particular and channel partners in general," Manoj Khanna, secretary of CMDA said. He said this decision from the High Court would perhaps bring end to a case that they have been fighting since the past 2 years.

According to him, had the Court accepted the Commissioner's claim that the products fell under Section 4 (i)(e) of the DVAT Act, the purchasers of these products would have been forced to shell out a tax amounting to 12.5% - the amount of the ink toners and cartridges.

It may be pointed out that the altercation in tax norms in 11 states, earlier this year, had left IT partners in the lurch with channel associations divided over the modus operandi to combat the new tax regime of 12.5% VAT.

The states of West Bengal, Maharashtra, Delhi, Karnataka, Andhra Pradesh, Haryana, Punjab, Chandigarh, Goa, Jharkhand, and Kerala - all fell into the category to levy VAT at 12.5% for select IT products.

Various resellers' bodies had plunged into action to press upon the respective states to reconsider the decision. Mumbai-based TAIT and Kolkata-based COMPASS were also in the fore-front demanding that IT products be allowed to continue attracting 4% VAT.

Source : ChannelTimes.com - Mumbai, India, dated 06/09/2007