By Dhaval Valia, CRN, July 10 2009, 1700 hrs
Delhi-based Computer Media Dealers Association (CMDA) has sent a notice to MAIT on the issue of back-end rebates and has also threatened legal remedy if their requests are not given due consideration.
In a letter shot off to MAIT and leading IT vendors, the association has asked the industry body to work with its members like HP, Samsung, Canon, and Epson to create a policy of ‘upfront business’ which essentially involves doing away with the vendors’ practice of back-end rebates.
Puneet Singhal, President, CMDA, has argued in the letter that the issue of Service Tax on incentives has emerged primarily due to the aggressive back-end rebate practices employed by vendors. Further, CMDA has argued that the back-end rebate policies have resulted in trade defaults and resulted in losses for channels.
CMDA has urged MAIT to work with its members to arrive at a ‘no strings attached’ and ‘upfront business’ practices in order to create a clean business environment.
“Most partners earn their profits through back-end rebates given by vendors on targets achieved. There is immense target pressure from vendors on partners which leads to many of them selling products at no or marginal upfront profits. Also on many occasions there are delays and denial in paying the back-end rebates which causes stress and mental trauma to partners” said Manoj Khanna, Secretary, CMDA.
CMDA has also demanded that in case its request for “doing upfront business only’ is not implemented then MAIT on behalf of its members should give them an undertaking that absolves the channel members of all liabilities incurred while conducting business based on vendors’ back-end incentive policies.
CMDA has also said that if their requests are not favorably considered the matter would be dealt with as per the available legal remedies. |