Post GST pricing suggestion confuses IT partners
has made it clear that we will be getting only 40% input out of all sales, this is the biggest call for concern as of now according to me; as the IT industry is working on 3-4% of margins at maximum on retail level and around 2% on distribution level. It is difficult to liquidate the stocks as the dealers also know there is no way to buy stock and make money as GST is coming. Also there is lack of clarity in monitor business,as it should be clear in terms of taxation on particular things”.
In talking to The DQ Week, Neeraj Agrawal, Secretary, Computer Association of Eastern India(COMPASS) shared, “From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated to be around 25% – 30%. Introduction of GST would also make Indian products competitive in the domestic and international markets. As far as IT market is concern and as a responsible association we have send message to all our association members for the necessary precaution / measures to be taken by them, we have send advisory to all OEM’s & vendors on behalf of Compass requesting them to co operate with the channel and to come out with prudent policies so that there is no losses to channel partner for the closing stock in VAT regime. In recent past we have organised few seminars on GST”.
Neeraj further added, “After the meeting of GST Council on 3rd/4th June we are expecting more clarity on GST and hence we are planning a seminar just after that, both with the Government Officials and GST Consultant so that our members can be updated about the FAQ’s. We expected bit lower rate of GST in IT Product which mostly is in 18% – 28% slab. We have submitted our suggestion through Confederation for the amendment but are expecting MAIT and other Federation for giving representation to Finance Ministry”.
It is difficult to predict and quantify the impact on the IT industry before the government announces the final GST rate, discussed above are some reactions from the IT association’s leaders all over India on the recent announcements .