|
We have a medium-sized account which has defaulted for more than eight months for payment. How can we build a case against them, and then proceed for legal action?
Ashok Danole, Automation Experts, Mumbai
T G RAMESH — You may collate all the details in the form of documents which provide complete evidence of the transaction(s) with this particular customer. These documented evidences could include mail correspondence (payment reminders) sent to the customer through registered post with acknowledgment, e-mail reminders that the customer has responded to, invoices and purchase orders. Once you have all this in place, approach a local civil lawyer for filing a legal case against the defaulter.
You have not mentioned the amount of money due, therefore I am unable to suggest whether or not it is worth going in for legal action. Please note that you will have to spend money for hiring the lawyer for his professional services, paying court fees, and then meeting other incidental expenses. After spending these amounts and considering the time the legal proceedings will take, if you don’t get back all your money the whole effort may be a waste. I suggest that you initially approach a local civil lawyer for his inputs, and then proceed accordingly after giving due thought to the points I have mentioned above.
Currently, the VAT on LCD/DLP projectors is 12.5 percent even though these are PC-connected products, whereas the VAT for all other connected products is 4 percent. Why this difference?
Sachin Pradhan, Papillion Marketing & Services, Nashik
T G RAMESH — The difference is mainly due to the product classification. LCD/DLP projectors are classified under the cinematographic equipment category, which includes products such as video cameras, projectors, overhead projectors and enlargers, and are therefore not classified under IT products. VAT on this category is 12.5 percent.
One of our large customers is not ready to accept any orders for Microsoft software products with service tax (ST). Meanwhile, Ingram is accepting the orders with ST plus VAT. When is this problem going to resolve?
Rahul Meher, Leon, Pune
T G RAMESH — Rahul, as you know, all of us have been facing this problem from May when the ST Department issued a notification to levy ST even on software products. To aggravate the matter further, the state governments continue to charge VAT.
Although the ST notification is contentious, we have no option but to abide by the law until the matter is addressed favorably by the government; hence we all continue to pay both ST and VAT. I am hoping that the government will sooner or later take cognizance of the matter and possibly reverse the ST on product licenses.
Many software resellers in the country have recently formed an association to jointly address this issue of double taxation (VAT plus ST). To my knowledge, the association has already made a representation to Nasscom to take up this issue with the concerned regulatory authorities and the finance ministry.
At this moment, we cannot predict when and how this problem will get resolved. We may have to wait from some more time to know the outcome.
Due to the slowdown, many corporates are delaying payment for as long as 60-90 days as against the contractual payment period of 30-45 days. Will it be fair practice to charge them interest of 24 percent as per the terms on the invoices? How can this be calculated, and would the additional interest amount attract further tax?
Ashok Danole, Automation Experts, Mumbai
T G RAMESH — With the economic downturn, many customers are delaying payment, which in turn threatens to affect the working capital cycles of channels. Many customers are also feeling the credit squeeze, and finding it difficult to get financing from banks.
In such a scenario, if you are able to convince the corporate customer to pay interest, you may go ahead and collect it. Interest calculation must be done based on agreed credit terms. For example, if the agreed credit term is 30 days and the customer pays by the 60th day, you have to calculate interest for the differential period of 30 days. The additional amount may be treated as other income, which is liable for income tax. But if you have an interest burden in your books of accounts, this interest income can be set off against the interest you are paying on your loan instruments.
Though we have an annual employee performance appraisal system, it isn’t working effectively. For example, we continue to miss appraisal deadlines. Politics has increased in the company, with employees trying to out-do each other in trying to be in the good books of the management. Please suggest how we can make the appraisal system work in our organization, and address the above issues effectively.
H R Nair, Logitech Solutions, Vishakhapatnam
VINAYA — Having an effective appraisal system is essential for the growth of an organization because it brings accountability into the functioning of the company. A good appraisal process helps identify and reward performance. It also provides invaluable feedback about the company and the work culture.
To make the appraisal system work effectively, it’s imperative that team leaders who appraise the employees are adequately trained regarding appraisals. This aspect is most important to make the performance appraisal mechanism work well.
The issue of politics entering the appraisal process is a serious matter, and needs to be addressed urgently and decisively. To make the entire process objective, you have to clearly define the KRAs (key result areas) of all employees at the start of the appraisal period. It’s important that the KRAs be realistic and practical. Many companies set KRAs that are impossible to achieve, and this obviously demotivates employees.
As the leader of the organization, it is essential for you to ensure the effective functioning of the appraisal mechanism. You need to emphasize and communicate better the importance of the appraisal system. To prevent delays in the process, make it mandatory for team leaders to submit appraisals of their teams before they themselves are appraised.
A good appraisal process helps evaluate performance gaps both of employees and of top managers. The process should be designed to bring out the concerns and grievances of all employees. The feedback received during an appraisal should be used to improve the work culture of the organization. Eventually, this helps to get better performance out of employees.
Disclaimer: The views and opinions expressed by the panel of experts in this section are solely their own and neither reflect the opinions of their respective companies nor those of the editor and publisher of CRN and UBM India Pvt. Ltd.
page l 1 l2 l |