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 IT industry on the DRI radar
Seems like DRI has decided to feast on the IT industry this Diwali. With the recent raids, the revenue intelligence body has created a fear psychosis among IT importers and manufacturers. After the raids on software importers, DRI has now trained its eye on hardware companies. HP India was recently raided and served with a notice to pay up Rs 100 crore in tax dues and penalty. DRI allegedly found records of value manipulation to evade customs duty at HP. The buzz is that DRI may raid a few other IT manufacturers in the coming weeks.
DRI has managed to collect deposits, against tax dues and penalties, to the tune of Rs 60 crore from IT importers. While HP has reportedly deposited an amount of Rs 30 crore, nine software importers are said to have deposited a total of Rs 30 crore, but under protest. The Software resellers still maintain that they have done nothing wrong and followed the import procedure as suggested by Microsoft and their legal counsel; and are being unduly harassed by DRI. HP, on the other hand, is tightlipped about the DRI action.
What’s in a name?
Don’t ask Shakespeare, ask ISODA. The recently formed software dealers association had to undergo a name change because government rules forbid the use of India or Indian in the name of an entity listed under the Society Act. As a result, the association has replaced the I for Indian with I for Infotech.
Due to name change and subsequent registration of ISODA, there has been a delay in launching an aggressive lobbying effort in Delhi against service tax on software. But now with the new name registered, ISODA has launched a two-pronged approach to address the matter.
The association has approached a couple of Members of Parliaments, who have agreed to raise the question of double taxation (ST+VAT) with the finance ministry. ISODA has also requested a meeting with the finance ministry and the IT minister. At the same time, ISODA is also taking legal help to appeal against service tax on software products in the Apex court. The association has already resolved that, if the lobbying efforts in Delhi fail to bear favorable results, they will file a petition with the Supreme Court.
Kudos to ISODA members who are relentlessly fighting for channels rights, when a leading association like Nasscom has failed to protect the interests of the software industry. |