Relief For Rajasthan Traders: VAT On Consumables Reduced From 14% To 5%


Ahead of the union budget, the state government of Rajasthan has given a big relief to the IT and consumables dealers. The Commercial Taxation of Rajasthan has recognised laser printers and ink printers consumables as integral part of the printers, therefore, these left out items will be charged under 5 percent VAT.


Earlier, due to ambiguity, some of the traders of Rajasthan were charging it under 14 and 5 percent due this IT traders have undergone losses. Moreover heavy penalties had been slammed by the tax department on top four to six big dealers of the Jaipur.

The recent notification from the Commercial Tax Department has cleared the ambiguity and now all the major IT items including IT products, peripherals, accessories and parts thereof will be deemed to be charged under 5 percent of VAT.

The notification has brought cheers to close to 3000 IT partners across Rajasthan, who have been seeking clarification on these items for last two years. Starting this month, all the national distributors have started billing these consumables under 5 percent VAT, said Jaipur partners.

The efforts being put in by Jaipur based Rajasthan Computers Traders Association(RCTA) who was seeking this long pending clarification has been commendable. Following the legal cases won by printing vendors Canon and HP against State Commercial Taxation department, the association has been appealing to the government to look into the ongoing VAT confusion on printers cartridges.

They wanted commercial taxes department to bring out clarity on whether these item listed in RVAT entry# 105 will be falling under 5% or 14% of VAT charges. The previous and current team of RCTA had raised this issue at various forum, but after long wait, the association has managed to settle the dust.

Last year in February, the state government categorized all the computers items like laptop, desktop, printers and consumables etc under 5% VAT in the state, but there has been no clarity on taxation structure on printers cartridges.

Sugriv Singh Ranawat, president RCTA said, “In our appeal to the Chief Minister we have sought to put printer cartridges with other computer and consumables items and resolve this confusion of 14%. Moreover, we have asked government to exempt five of the major IT dealers of Jaipur from the penalties of worth Rs 2 crore, who were previously charging printers and networking products under 5% before February 2013.”

Speaking to Channeltimes, Kailash Gupta, ex-president, RCTA said, “The current notification of commercial taxation settles all the dilemma. The interim notification from the commercial taxation department says the found items(consumables) are integral part accessories of the basic product, which are falling under 5 percent therefore, cartridges and toner deemed to be falling under 5 percent. It has to be listed in the category 28, parts and accessories thereof. Now all the IT products, by and large is under 5 perecnt VAT. However, we are still fighting to bring parity amongst converged products like CCTV, web camera, digital, IT cameras, projectors and regular epbx system. Converged products are still under the dispute. We have already taken with them. We dont want to have tax confusion in any of the IT and converged products.”

Dealers feel, this parity of taxes will bring back the lost business opportunities like bidding for big government tenders. Moreover, it will remove interstate goods infiltration, trade off business, gray channel and help to restore the unorganised consumables business in the state.

The disparity in VAT from one state to another and on other IT products are a big issue, which these IT traders have been raising. Like Rajasthan, even Punjab dealers have been asking Punjab Government to create uniform tax structure in the region.

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