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GST impact: Small & big retailers log into rising demand for PCs

Karan Choudhury/ 18 Jul 17 | 02:48 AM

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For five years, Vikram Katyal, a small-time computer hardware and software retailer in the textile town of Panipat, Haryana, says he’s fought near-bankruptcy and snide remarks from friends and family to keep his business afloat.

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Sales of personal or commercial computers never seemed to pick up. According to research entity IDC, shipment of personal computers (PCs) in India declined by 15.2 per cent over a year before to 8.58 million units in 2016, due to sluggish consumer demand and less of large projects. And, the commercial PC market, at 4.35 million units in 2016, showed a year-on-year drop of 17.4 per cent.

However things have changed rapidly in the past two months, soon after it dawned on many that the national goods and services tax (GST) would be a reality. “Suddenly, I started getting calls from businessmen, both big and small, enquiring about GST-enabled computers. From mid-May, I started getting orders for commercial computers. In the first week, it was one or two orders a day but by the next week, I started getting orders in bulk from not only Panipat but all the nearby towns," said Katyal.

In the past three weeks, he says he’s fulfilled orders worth at least 12 lakh, which has left him with renewed hope and a tidy chunk of change. “We waited for such a windfall for a long time. It is not only computers, I am making long-term contracts with my clients for providing after-sales service, where the real money is," he added.

The GST is a completely computerised tax regime. The result is that PCs, laptops and tablets have become more common at small mom-and-pop stores. Retailers who’d only kept calculators to manage their business are rushing to buy computers. While the numbers are not out, major PC makers have started witnessing the spike in demand and believe the next few quarters would see sales rise even more. 

“With [the] implementation of the GST, we see the graph of PC adoption going higher in the coming months. From the past couple of months, our team was working towards developing GST-enabled machines; we have introduced a range of desktops, laptops and AIOs (all-in-ones) which are GST-ready. We see this as a huge opportunity to assist start-ups, businesses and trades in adopting this change and growing, by utilising technology at its best," said Sudhir Goel, head of commercial business at Acer India. 

Demand has spiked at Asia’s biggest computer hardware and software hub, Nehru Place in Delhi. Business people and smaller computer hardware shopowners from other cities are making a beeline at the various shops in the area, ordering GST-ready commercial computers in bulk. “There’s been a spike in demand for commercial computers in the past few weeks, due to GST," said Mahinder Aggarwal, president, All Delhi Computer Traders Association (ADCTA).

“We have had a huge response since the launch of services in mid-June. Around 17,700 small businesses and professionals have signed with us to get GST-compliant. Around 60 per cent of our customer base is from Tier-II and Tier-III cities," said Rashmi Khetrapal, founder of Count Magic, a GST software company.

However, the very tools meant to ease the process of filing the GST are caught in a web of intricacies in the new tax regime. There are major differences in tax rates on computer hardware — the GST on central processing units is 18 per cent and on monitors at 28 per cent. 

“The differences in taxes are creating a lot of confusion among traders. We want the government to come with one common tax for the whole unit and the components that go with it," added Aggarwal.

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