SW dealers still awaiting CENVAT benefits

NEW DELHI, INDIA: It has been more than two weeks since the central government reduced CENVAT from 12 percent to eight percent on IT products.

However, software dealers are complaining that the reduced custom duty has still not been implemented by principals like Trend Micro, Tally and Symantec.

According to market sources, Microsoft has implemented the reduced excise duty on its licenses, while Adobe is soon to reduce its prices. Software channel partners informed that they are in dialogues with distributors and concerned vendors to reduce their prices at the earliest.

Speaking on the issue, an official from Microsoft commented that it is the responsibility of distributors to implement the modified excise duty, as the company is not a sales entity in India, so the authority of distribution and sales rests on the distributors.

When inquired with Symantec, Ajay Verma, Director—Channel and Alliances, Veritas Software Solutions informed that the decision to increase or decrease the tax as per the government rules is taken at the billing point and in this case, it is distributors who have to implement the reduced tax benefit.

“As far as Symantec is concerned, the billing is not done by us but by the distributors and hence they are responsible for reducing the tax,” he said.

Amit Nath, Country Manager—India and SAARC, Trend Micro said that if there is any modification in the excise duty, ideally the distributors have to follow it.

“As per my understanding, the reduced CENVAT is applicable on boxes and physical products that are imported. It is not applicable on electronic licenses and hence no reduction has to be done on Trend Micro software. Moreover, no matter has been escalated to us regarding the issue,” he further clarified.

Informing software dealers about the reduced CENVAT on software, ISODA had earlier circulated a notification among its members that stated, “In case you have orders placed which are not received and billed by distributor you are requested to demand a price reduction of four percent.”

While protesting against distributors like Redington and Ingram Micro for not implementing the reduced CENVAT on software products, ISODA had observed a ‘no transaction day’ on Dec 22.

Members of the association did not place any payments, orders. Dealers informed that all the bills and orders received from distributors were turned away.

When contacted by The DQ Week, PS Neogi, President—IT Division, Redington and K Jaishankar, MD, Ingram Micro, refused to comment on the issue.