New Delhi: Federation of AII India Information Technology Associations (FAIITA), the national umbrella body over all state IT federations/ associations met the central minister for IT and communications, Ravi Shankar Prasad to put forward their demanded to rationalize the tax structure to ‘Flat 18%’ for IT products.
The association represents 30 thousand member-business organizations across India, pursuing business nearing to 20,000′00 Cr and welcomes GST initiative of “One India One Tax”.
“We are hereinafter submitting concerns arising from differential tax slabs for various IT components, accessories, Networking equipment and spares, causing serious complication and anomaly. Submissions to rationalize GST’ Slab for all IT Products,” mentioned the association.
Here are the reasons which were quoted by the association to rationalize GST Slab for all IT Products.
1. 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)
2. 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 slab. 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.
3. 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.
4. 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.
5. Notebook book computers as a product is saddled at GST @18% while standalone notebook battery and charger is saddled @28%(currently attracting 17.5%).
6. 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 28% in GST.
7. 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.
8. The Association emphatically plead for one GST slab of 18% for all IT products to simplify IT project implementations and avoid misrepresentation.