The High Court of Madras issued an interim injunction to Samsung India
Electronics and its distributors in Tamil Nadu against levying value-added tax
(VAT) higher than four percent on printer toners and cartridges.
In its plea seeking interim injunction, Samsung (Printer Division) had
included its distributors-Carewel Systems (Vellore), Vijex & Company (Chennai),
Sukkra Traders (Puducherry), Micro Automation Info India (Tirupur), Vijex Office
Product (Coimbatore), Vinay Agencies (Erode), Uttam Marketing (Chennai) and
Micro Machines (Salem) as petitioners.
The judgment of Hon'ble Justice V Ramasubramanian restrains the appropriate
authorities from recovering tax with respect to sale of printer
toners/cartridges at a rate higher than four percent tax.
The order is applicable to all the petitioners.All the partners The DQ Week
contacted hailed Samsung's support in this issue.
R Krishnamoorthi, MD of Tiruppur-based Micro Automation Info India enthused,
“Samsung stood by its words, and we are very thankful to the company for its
committed support.” On a similar note, Rajesh Kumar, Proprietor of Erode-based
Vinay Agencies said, “Samsung always supports its partners and will not let them
down. We will be united and face the VAT issue together.” Saravanan, CEO,
Carewel Systems, Vellore, expressing relief shared that they were happy and
content to be part of Samsung family.
The Tamil Nadu VAT Act-Schedule 1, Part B states that toners and cartridges
are excluded from the four percent tax. Citing the act, the appropriate
authorities claim that the product thus attracts 12.5 percent tax. However, all
the partners across Tamil Nadu have been levying four percent tax on toners and
cartridges. The department has been issuing notices to several partners across
Tamil Nadu to pay 12.5 percent of VAT on all those ink cartridges and toners
sold from 2007 till date.
In this regard, Canon had obtained an interim injunction in Madras High Court
in February 2008. Earlier, Manufacturers Association for IT (MAIT) had been
updated by the state government of Tamil Nadu in 2007, that the ink cartridges
and toners attract a VAT of 12.5 percent. But, this was allegedly not
communicated to the channel partners. It was viewed as a serious case of
violation by Confed-ITA .