One Week Of GST: What Indian IT Channel Thinks?


Chennai: The Goods and Service Tax [GST] that created much waves for months, was finally launched on July 1. Like experts from every sector, the Indian IT channels have varied perspective on the rates levied on the products. While most of the IT products fall under the 18 percent category, few items come under 28 percent.

Not just IT, the channel partners from the other verticals are also gearing up for the smooth rollout for the GST. According to a DNA report, companies across fast moving consumer goods, consumer durables/electronics and retail such as Hindustan Coca-Cola, Dabur India, Nestle India, Videocon Electronics, Whirlpool of India, BSH Household Appliances, Acer India, Shoppers Stop, Bisleri, Heritage Foods, Samsonite International are ready. However, the same is not true with their channel partners.

Dabur India said that the company was fully geared up for GST as it had engaged an external consultant for the past one-and-a-half years to work on GST. According to CFO Lalit Malik, Dabur had completed all the groundwork regarding amendments in its IT infrastructure much ahead of the actual announcement to ensure a seamless transition, reports DNA.

The ground reality in the distribution channel can be easily gauged from the results of a survey conducted by EasemyGST, which shows that half of the respondents are still not aware of the GST compliance calendar.

“Similarly, 50 percent of the participants are unaware of the GST compliance rating mechanism, which means that they are not fully aware of the consequences if they default. An alarming 74 percent of the participants do not have a list of GSTIN for their vendors and distributors, which means that the business value chain will lack coordination. About 70 percent of the participants have not chosen a service provider for filing GST,” the report said, adding that there is still much ambiguity around how GST will impact their respective industry.

It seems that the IT vendors have already started sharing the HSN codes with the channels while the channel partners are looking for the clarification on the input credit calculation before they start invoicing.

“Over the last five days dealers are busy arriving at stocks, searching for HSN code, updating the software and completing the migration formalities. Since yesterday dealers have started billing in the new system but the price advantage is not there, as the fresh material is yet to be billed by distributors. We expect the new pricelist of most OEMs and vendors by Monday. Currently most dealers are busy in liquidating their stocks,” said, R Sridhar of Triangle Technologies, Bengaluru.

Nandini Sharma of Comnet Resources, Kolkata, said that the actual momentum has picked up from July and is hopeful of discipline in business within the GST. She feels that the initial teething problems in transition will be over and initial clarity will come only from next week as the regular movement of stocks take place.

Alok Gupta, CEO, Unistal, New Delhi, said that the traders had started adjusting with the new norms of GST. However, he feels that most of the offices dedicated for GST do not have officers in place and the third week of this month should be the right time for the pick up from the market.

K R Chaube of Techlink infoware in Mumbai is surprised that earlier it was double taxation on the software products and now it is just single taxation. Even then the vendors and customers have no proper clarification. On the hardware side, both the traders and system integrators are feeling a vacuum with no movement happening. “The existing sale has also come down and the available stocks are being liquidated. The channel partners are expecting prompt sale only from next week,” he said.

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