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LUCKNOW, INDIA: After a weeklong tussle with the state government, IT channels partners, along with other dealers in UP finally called off the statewide strike. The decision to call off the strike came after commercial tax officials agreed to reduce the 12.5 percent VAT the state government had raised on various items on September 19, to four percent. However, on products like TFTs, UPS and multimedia speakers the 12.5 percent VAT would remain. The state government has also levied two percent entry tax on all the products.
"We continued the strike for seven days and lifted it only after the state government rolled back its decision to hike VAT from four percent to 12.5 percent. However, the IT market has suffered an estimated loss of Rs 30 crore due to the seven day strike," said Rohit Kohli, President, Uttar Pradesh Computer Dealer's Welfare Association (UPCDWA).
Arun Bhargava, President of Kanpur Computer Dealer's Association informed that though the government has revoked the decision to increase VAT, it has announced that the increased VAT would be applicable on certain IT products.
"The government's decision to hike VAT on certain products will effect the IT market of the state and besides being a festival season, no excitement is seen in the customer behavior," commented Bhargava.
KN Shukla from Lucknow-based Login Uptech informed that now the channel as well as customers would have to accept the increased price of products, and this would surely affect the sale of IT goods, even during the festival season.
Opposing the state government's decision to increase VAT from four percent to 12.5 percent and reintroducing the entry tax of two percent on IT products, channel partners and solution providers across the state had gone on an indefinite strike from September 22. Though the strike was called off on September 29 the VAT increment continues to exist on certain products.
Products on which government has increased VAT were IT goods, telephones, CDs, DVDs, wireless equipment and several other electronic gadgets, dry fruits, tea and mobile phones.
