The city-based IT entrepreneur and representative of the Computer Dealers Forum of Goa(CDFG), Mandar Manjarekar talks passionately to Digital Goa about the distress faced by Computer dealers in Goa due to unregulated online sale of electronic goods and the free distribution of laptops, notebooks and tablets under the Cyberage student scheme.
Tax online stores in the same way that we are taxed
I sincerely feel that there has to be a regulation of the online trade done through E-commerce portals. As a first step we expect the government to tax online vendors in just the way that they tax us. For every IT product that we sell we pay 5% value added tax (VAT) per say. But there are further classifications of IT products for which VAT is charged differently. For Consumer electronics the VAT is 12.5 % for products which are below 30,000 and for above 30,000 worth products it is 15% . A lot many of the products which we sell like fall into the 15% VAT category. This VAT addition increases our selling price.
Online stores procure their products from anywhere and can easily evade many types of taxes. There is no proper watchdog mechanism in place- neither to monitor the functioning of these stores nor to enforce strict tax payment adherence by them. So they can afford to sell their products at a comparatively cheaper rate.
Our showrooms have become display units for online stores
The hitch here is, we who are sincerely doing our businesses by being within the ambit of the laws and guidelines of the government cannot afford that kind of reduction in prices. First of all we have to pay the state government various taxes including sales tax, value added tax, service tax, and commercial tax among others. Secondly we have to engage in the exercise of brand building. Money spent on advertising amounts to a major chunk of our expenses. Thirdly we have to display the products through our showrooms and also stock them in warehouses. This again involved considerable setup as well as maintenance cost.
Where is the investment for the online guy? 10 days money back guarantee assurances are fine in their place but what after ten days? Is the quality of the product really guaranteed? Customers also don’t think of these things and make purchases by just looking at the reduced cost price.
If this continues it will lead to shut down of business of all those IT hardware vendors who are putting in lot of hard work and doing their business honestly. Many consumers come to my showroom just to see the products. They eventually go and purchase the product online. As though our showrooms where display divisions of these online shop. How is our business going to survive?
E-retailing is a big challenge
This e-retailing is a bigger challenge in the long run. Everybody is sinking in this exercise – local retailers, government, customs, excise and even the customer. Government loses on taxes. Customs loses on duties as parallel imports take place. Thousands of products are imported and only duties for a few hundred are paid. Many clients have suffered due to faulty or sub standard products. But those stories never get highlighted.
Government should introduces practices like E-Sugam form to streamline online trade
States like Karnataka, Kerala and Tamil Nadu have been able to chalk out a well defined policy in this regard. Notices have been sent to online portals regarding hundreds of crores worth tax evasion. Another important thing that is put in place is the effective monitoring of entry of goods in the state from outside.
For instance, if I am a dealer in Karnataka and I am ordering some material from outside Karnataka I have to fill a form called as E-Sugam form. A copy of the invoice has to be attached to the E-Sugam form and uploaded on the Government portal. Corresponding checkposts have access to these forms online. When goods carrying vehicle reaches the checkpost, only those carrying duly filled E-Sugam forms with the goods list matching the material that is given there are allowed to cross the border. Or else the material will be confiscated.
This is a very simple yet effective system. If a small little fraction of the crores of rupees that are otherwise wasted on various IT projects is spent on systems that streamline processes it will make a lot of difference.
Most of the cyberage computers are sold by students for a few thousand rupees
Secondly, about the cyberage scheme. What is the real purpose of giving these laptops to students? As such these are low configuration machines and are not very useful to students who opt for professional education. In most of the case these students will sell the laptops for a few thousand rupees and go for higher configuration machines which they really need for serious computing.
Empanel vendors from across state for Cyberage scheme
Another important issue is why is the Cyberage scheme is implemented in such a way that it benefits only a certain set of vendors who are in good book of the authorities? Why can’t the government give a choice to the students to procure the laptop from empaneled group of vendors distributed across Goa? This will ensure that all vendors get an equal share in the business generated through the Cyberage student scheme. Moreover the students can opt in for high end versions based on their requirements by putting in more money on their own.
Give free laptops to only low income families
Actually almost all middle and high income families have computers at home. So the better idea would be to given these laptops or notebooks for free to only those students belonging to families below poverty line. Give them really good laptops – no one will object!
I also allege that all the Cyberage computer scheme handling agencies are hand in glove and are only thinking about vested interest and not the interest of the students.
What right do the authorities have to blow off the exchequers money ? People close to the politicians are the suppliers since 2002 and a red carpet is put in for them irrespective of the party in power. All political parties make fool of us. The Cyberage scheme seems almost like a lottery.
It is sad that for our decision makers freebies take priority over infrastructure. We don’t have essential medicines. Primary schools & health centers are in poor state yet we tend to spend crores on distributing laptops and notebooks as freebies. Initial they did it to build their image. Now it has become almost like a compulsion.