Kerala - Reduction of proposed on I.T.Products

Channel partners in Kerala are heaving a sigh of relief following the state government's announcement to reduce Value Added Tax (VAT). The VAT will be reduced by 8.5% on products like cartridges, toners, and multi functional devices.

On Monday, T.M. Thomas Isaac, finance minister of Kerala, had announced tax reduction on computer accessories, hospital equipment, and generators. According to him, this was done to avoid losses occurred to the state as others were following a lower tax pattern.

According to Toshy P. Matthew, Cochin-based proprietor of ABC Systems, this reduction will clear all the existing confusion over the VAT that s being billed by the vendors.

"The decision will finally bring some uniformity, as some vendors like HP were charging us a VAT of 12.5 % as compared to Epson's 4%," he further added.

Earlier in August, the state government had increased the tax on the multifunctional devices from 4% to around 12.5% after interpreting these products as fax machines.

Elucidating on the decision, Vinod Kumar, president of Kozhikode-based Malabar Information Technology Dealers Association (MITDA), stated, This would certainly help in increasing the sale of these products.

"The cheaper costs will certainly ensure enhanced business for these printers. I'm expecting an increase in business by around 22-25%," added Matthew.

However, P. Harikrishnan, president of All Kerala Computer Manufacturers and Dealers Association (AKCMADA), said, "Partners shouldn t get into any premature celebrations. They should wait until any formal communiqu is drafted."

The channel fraternity believes that the changes will be implemented within a period of 2-3 weeks.

Source : ChannelTimes.com - Mumbai, India, dated 27/10/2007