Karnataka Channels Wary About New Tax Filing Reform


5 Aug 2011
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E-Sugam has not come as a Sugam (joy) for the IT channels in Karnataka. The partners are wary of a new reform from the Commercial Taxes Department (CTD), Government of Karnataka for payment of value added tax (VAT).

The government has provided E-Sugam as a facility to the dealers across the state to upload the details of the goods dispatched/received on the Website of the CTD, following which they are given a unique token number.

Although the service has been piloted since February 2011, mounting the information on E-Sugam was not mandatory, or it was limited to inter district billing. But now the Karnataka government has made it mandatory for dealers carrying goods above Rs 20,000 to carry a copy of the E-Sugam alongwith the bill, and these can be checked at check posts anywhere in the state. The amendment will come into force from January 1, 2012.

“The idea behind this initiative was to ensure complete transparency since there were complaints that some goods were moved from Bengaluru to other parts of the states without proper invoices, resulting in revenue loss,” informed J Prasanna, a city based tax consultant The department is planning to take help of excise and other revenue collection enforcement bodies to track goods under shipment. Goods without E-Sugam forms would be confiscated, and the trader would be fined.

While the intent of the initiative has been appreciated by the partners, they pointed out that the Website is too slow, and that it is very difficult to download forms. “From our experience, the quality of service was not very good. At times, the Website is very slow. Forms cannot be downloaded, causing delays in shipments. Though the department has announced availability of two more Websites, we feel this is an unwarranted paper work” said Sudhir Sankar, CEO, IBS Computers.

The Association of Information Technology (AIT), the Bengaluru-based channel association is planning to meet with the officials of the CTD on December 26, 2011. “The government officials have accepted our invitation for a meeting at the Century Club on December 26, 2011. They have agreed to clear our doubts, and look at our side of story. Many distributors issue upto 300 bills a day, and this would clearly affect their business. It would even affect a small time reseller issuing less than 10 bills,” said Anatharam Varayur, MD, Webcom Solution, and VP of AIT.

According to the partners, the main grouse of the IT community is that several technology goods go as proof-of-concept for demonstration, and on delivery challans. There is no provision for such transfers in the E-Sugam. Additionally with over 100,000 bills being issued for materials in transit in Bengaluru alone (across all categories), that comes under E-Sugam, additional paper printouts would not be eco-friendly.

Prasanna estimates that an accountant cannot fill up more than 40 bill details a day in the present form and based on current bandwidth speeds.

Partners are worried about increased costs in administration and accounting. “We cut anything between 60 and 100 bills a day, and if we need to issue forms for each bill on the Internet, we need to plan dedicated staff for the activity,” said Dinesh Nair, Vice President, Aldous Glare, Bengaluru.

source : crn
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