Voice of VARs Bengaluru

Seven months after the implementation of Goods & Service Tax (GST) across India, there has been a mixed bag of reactions among the businesses. Though people have embraced GST with doubts in their minds, they are slowly getting swiped out as government is starting to consider recommendations regarding GST.

While discussing the impact of GST with the IT Value Added Reseller (VAR) community of Bengaluru, they showed their support towards GST and pointed out the benefits of it like growth in business, ease in inter-state transactions, reduction in cascading effect of taxes, inclusion of GST in Custom Duty and Right to Use of Goods etc. Inspite of these benefits the VAR community also highlighted issues like high tax slab, complicated filing process, bleeding IT infrastructure of GST portal which need to be addressed.  

K.V. Arun Kumar    
Managing Director, 
Atul Enterprises:

The introduction of GST has proved favourable for IT industry as a large number of companies which were not buying IT products have started investing because they are getting GST credits because in VATs they were not getting any credits. But the most disappointing factor is that the tax rate is 18%. My suggestion is that the levy of GST tariff for all the products should be at a slab of 12–15%. 

So the norm of one tax, one services should be preferred. But we are finding difficulty in uploading forms GSTR1 and GSTR2. We have not been able to upload GSTR3 and it got postponed again. So they should have a better website, bandwidth and servers. 

S. Ashok Kumar    
Purchase Manager, 
Supreme Computers:

Supreme Computers has been engaged in HP peripherals business for over 15 years. Post GST implementation, I do not find any changes as far as my business is concerned. It is the same thing that used to happen during the VAT regime and also in GST. I do not find any difficulty in sales.

Bharat Nanda    
Owner, RX Solutions:

The benefit of GST implementation is that we have come almost at par with those companies which used to import materials through different channels without paying customs duty. Since GST has become a part of the customs duty, we consider it a great move by the government. 

With high GST tax slab of 28% on laptop batteries and power banks which are our common products, we find this as an issue because 28% is a very high slab, whereas the margin is between 5% and 8% for distributors and the complete network. 

Deepak HS        
Proprietor, 
Pentagon Automation:

The challenges that we faced before GST was like inter-state transactions because there was no input credit that was available. We used to have confusion in some of the products whether we should charge Sales Tax or Service Tax or dual tax. As a retailer, we used to face challenges in terms of offsetting the input credit for Service Tax. So we always used to land up with an excess credit of Service Tax which we were not able to offset. Post GST, we have seen a lot of these anomalies have been addressed. One is inter-state purchases. Since it has become Goods and Services Tax, we have been able to set off credits whether it is goods or services.      

Dinesh Dhanapathi    
President, Association for Information Technology:    

 
From the perspective of Association, we have done justice in trying to ease in GST for our 320 members. We have conducted various fellowships before and after GST by inviting Joint Commissioners of Commercial Taxes to address the members. After GST was implemented, we organized some workshops for helping our members to get comfortable with it and clarifying doubts. 

I run a company called Symentrics Computer Systems which is involved in system integration basically focussed on services. When it comes to business dealings, it has not really changed for us, maybe costs. Taxation has gone up but we continue to get the same business as customers need services. I personally feel that what is good for the country is good for us and we are happy with what is happening. 

Harish    
Sales Head, Intellic Systems:        

We have been in the business for the last 15 years. We are partners for Dell, Lenovo and HP. As anything which gets newly implemented, there is a lot of confusion and it was same with GST also. It took some time for us to understand GST. Now we are used to it and things have been sorted out to a large extent. The GST structure needs to be corrected. From my business point of view, I was doing business in the state but with GST coming in we are doing business in other states also. We are also facing competition from other states. It is an open market. We are not witnessing grey market much now. 

Murlikrishan    
Managing Director, 
N.J. Dataprint: 

GST has proved a boon for our business. The advantage of GST is single billing and can sell products anywhere in the country, particularly when I import the duty is not being calculated for our production because we are manufacturing servers. Whenever we start something new it has some teething problems but we are going to enjoy the benefits of GST soon, not only nationally but also internationally as I am an exporter also. 

As an exporter, I get benefit while billing when I pay GST. Because of GST, I get more credit for more business.    

Nalin R. Patel    
Managing Director, 
Ankita Electronics:

After the introduction of GST from July 2017, there was a panic in the market. People did not know what is happening, government was changing information every month but now problems have started falling in shape. There are still some problems with public sector units as the government is holding the GST amount. But GST is helping people and business has also increased. 

N. Prakash    
Director, Towers Infotech:

 GST is good in one way but going in a way of one tax, one nation, especially if you talk about one particular sector will be better. 

People of Karnataka are early adopters of GST regime and we have also organized so many seminars in regard to that. So it was a very easy transition for us, but in spite of that we have faced several issues as technically it is difficult and the government was not prepared with respect to infrastructure, servers, software. GST is like a premature baby.  

R. Sridhar    
CEO, Triangle Technologies:

Regarding GST, it is good in a way for us because earlier in the VAT regime all our products were in Right to Use of Goods which is treated as a sale in 22 states, of which Karnataka is one. With GST coming in Right to Use of Goods comes under Service Accounting Core and from the business perspective there is a lot of clarity. What I have noticed with GST implementation is that the capex of many corporate has come down and the rentals have increased. Here in Bangalore, the IT rental market has picked up for the last two-three months.

GST is the way forward. There is no escape from this. 

Sairam Shetty                       
Director, Orchids Network & Systems:

I think GST is a good thing to go forward. Initially, there was no clarity but as of now I see there is a good amount of transparency that is happening. Government is not clear on certain things which will take some time to give more clarity in terms of taxation. One tax gives the flexibility to do business in any state of the country. Previously, we had to register for every state. But we do not have to do much as we can sell it from our state to different states. One nation, one tax is the way to go ahead and I would be happy if GST is implemented in the right way. 

Nemi Chandra Tejaswin     
Proprietor, Computer Mine:

There are a large number of problems with the usage of GST portal. The main purpose of GST is to avoid the cascading effect of taxes. In a scenario where I am still not sure whether my suppliers will really pay the tax which they have collected from me and the payment is made through bank. I am still not confident whether I will be held responsible to pay the tax once again. Our margin in this industry is definitely less than 18%. If somebody wants to close the business and run away, he can simply take 18% and run away without uploading the invoices. Then, we are supposed to pay the tax which we have already paid. We should have the bills.