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With the launch of Windows 7 in India, IT channel partners are gearing up for
considerable opportunities in system integration and distribution business, and
they are expecting that the sale would move up with the launch of new OS.
However, with the recently started confusion over double taxation system of
packaged software as issued by the government, partners are pointing that
charging of TDS at all level of transaction would lead to parallel import.
KK Jha, CEO, KK Software mentions that Windows 7 is expected to create a
revolution in the market because of its advanced features like remote access
option, and advanced multimedia and graphics. Sharing his thoughts on the issue
of piracy, he says, With this OS, it would not be easy to copy and circulate
pirated software in the market. It has got inbuilt features that would reduce
the possibilities of piracy.
Another issue that had put the channel fraternity into a state of confusion
over double taxation after the government had announced the abolition of custom
duty and the impose of service tax on packaged software.
Mentioning the consequences of tax structure levied by the government, PN
Prasad, secretary, Confed-ITA mentioned that with the imposition of service tax
and VAT at the same time, TDS is bound to increase at all levels of transaction.
This would increase the price of the software and partners will not be in a
position to enjoy margin. This would lead to rise in parallel import or
counterfeit software. The government needs to handle the situation so that it
does not worsen with time, Prasad says.
Hemant Chhabria, regional secretary, East, ISODA says, Windows 7 is a very
good product in terms of its features, designs and presentation. It is easy to
use and will be accepted by the customers. However, at the dealers level, the
charging of TDS at the transaction level is not favorable, as it kills the
margin. We are talking to the tax department and we are seeking support in this
regard.
Jha adds that that since the old inventory has been liquidated, the problem
of double taxation has been solved because the dealers are following the tax
structure as directed by the government and there is no conflict in the same as
service tax and VAT is being implemented on packaged software.
Talking about the expectation level of the channel partners about Windows 7
launch, Anil Sethi, group director, OEM says, Channel was waiting for the
launch to get to know about the features and up-gradations. New versions have
always been coming and the acceptance level depends on the users choice. Vista
could not do very well because Windows was always favorite of the end customers.
Giving his comment on double taxation, Sethi says, Whatever tax structure is
issued by the government, everybody has to follow it. We have to abide by the
law of the government. However, we had made our representation in alliance with
Nasscom seeking clarification on the issue. But now the issue has been solved
since the new tax structure is being followed on the fresh billing.
Though, the tax structure is causing pain in the neck of the channel
partners, they are not in the position to do much about it and they have
implemented it as per the laws. Dealers are now expecting the software vendors
to take a collective step and get the matter solved.
Amrita Tejaswi/DQ Week
maildqindia@cybermedia.co.in
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