IT@North-East: Two Steps Forward, One Step Back

India has an excellent position in electronic goods Trading, export and distributionaround the world, but ifwe see the other side of the country that is the north-eastern part which is long considered backward in growth and business terms. Even till now people have a 1980s view of the northeast.The image in people’s mind is that the region is ridden with insurgencies, which is not the case anymore.  Although the region has remained disconnected from the rest of the country in many aspects for a number of years but now they are becoming the growth engine of India’s new economy. Research says north-eastern states would be able to boost India’s ambitious plan

to capture the global IT market very soon. And on the other hand IT traders of North-East India felt the need of a common platform to protect the interests of all the IT vendors of Northeast besides ensuring a healthy competition and above all maintain customer and vendor relation.

Therefore to look after the same North East Computer Traders Association (NECTA) is poised to emerge as the undisputed leader in the north-eastern region overtaking other minor and local associations. It is the association of channel partners of the NE region but OEM Vendors and National Distributors also form an integral part of its IT Channel ecosystem. According to a report collectively called the ‘Eight Sisters’ have 200,000 micro small and medium enterprises (MSMEs), accounting for less than three percent of the country’s total MSMEs.

GST Impact on North-East IT Traders

GST will convert Northeast India into one unified market and will bring uniformity to the tax structure and transparency. As already mentioned above, this move is crucial to improve ease of doing business in North-east India and address the ambiguities of the current indirect tax landscape, proving beneficial for the economy, at large. It can facilitate seamless movement of goods across inter-state borders enabling better efficiency and spurring growth of the (e Commerce) sector. With various start ups being initiated in the Northeastern region, the upcoming entrepreneurs will get a boost to their start-ups. Stock Transfers In the present regime, in case of stock transfers, the dealers are required to reverse certain percentage of input tax credit. However, no such reversal would be required under the GST. On the other hand, presently, stock transfers does not attract any tax since these are transferred against Form F. Under GST, however, the person shall pay tax on such transfer on the transaction value. Some of the salient features of GST are:

Registration: GST Registration threshold is proposed at Rs 4 Lakh for NE states + Sikkim, and Rs 9 Lakh for Rest of India. However, the liability to pay tax will be only after crossing the threshold of Rs 5 Lakh for NE states + Sikkim and Rs10 Lakhs for Rest of India. Approximately 7-8 million businesses are likely to be registered under GST. Small dealers with turnover below Rs 50 Lakh have the option of adopting the Composition scheme and pay flat ~1 to 4% tax on turnover.

Impact on business investment

The dealers will have to pay full IGST on all interstate transaction at the time of sale and all stock transfers. Hence, traders will require an additional working capital for investment in tax.

Input tax credit

Traders will also get input tax credit (ITC) for taxes paid on input services. To this extent traders will be benefited which they can pass it on to customer and thus, making their goods cheaper.

List of non creditable goods will also have major impact on the dealers. Shorter the list higher would be the gain.

North-East IT markets at a glance

GUWAHATI - Assam Guwahati is the largest city of Assam and Northeastern India which lies between the banks of the Brahmaputra

River and the foothills of the Shillong. Guwahati might not be a tier I city, but when it comes to the IT market, it is the most growing in terms of commercialization and industrial development activities. Themarket has established its strong presence in the region and continues to be a dominant player with its wide basket of brands and products. Business is more depended on commercial progress as the growth rateis reaching high in terms of globalization and business projects. Therefore the markets demand growth is currently double the national average. But on the other side there are some issues which needs a point of concern over the IT Business.

On the current scenario channel partners have shared their views in different ways. Manjeet Talukdar of Oscar Computer & System says, ‘The market is okay, but the problems arise only when the payment getdelayed. The market is stading in growing mode, but there are a number of challenges to tackle’. ‘We have a trust on our association and the government. Taking decision to implementing GST is really a big relaxation to the partners like us. From first July the tax relaxation will play the vast role in upgrading the situation over the downfall

led by the same governments demonetization plan last year’ Shared, Hemant Jain, Khushi Systems.

Expressing his views on current market issue in the area Anil Harlalka of Balaji Computers said, ‘Because of the GST we are somehow circled in a problematic situation. ‘We have already kept much of stocks whose tax paid price will be remain in the same range. But after GST will implement the tax paid price will be changed to the consumer. So this is the loss we distributors are supposed to be

facing till the old stock will not get sold out.The other way round is the

stocks we will keep after GST the less tax will be payable and will sell

out in the perfect order’.

Same as Anil, Sandeep Bohra, Jupiter Technology says, ‘ The major

worry now is how fast we can finish the selling of current stock before

GST implementation. The tax relaxation is there after 1st July but

what about the current situation which is making us panic because of

the tax variation’.

Guwahati Channel Partners

Manjit Talukdar, Jeeten Sharma, Oscar Computers

Subrata Dhar,R S Computers

Deepak Choudhry, Eastern Technology Group

Sandeep Bothra, Jupiter Infology

Padam Chandra Jain, Jain Computers

SHILLONG- Meghalaya

Shillong is the hill station and capital of Meghalaya which is blessed with the monsoon shower 12 months. But apart from these natural beauties when there’s come the discussion on commercialization and IT business saying this will not considered wrong that the market is in process of establishing the IT hub in the area with the passing of time. There has been a rise in scarcity of IT Business. The distributors are planning a specific strategy for growing it faster. On the other side GST has also created an environment of anxiety and concern among the trading community in shillong. Retail trade are demanding lower tax on items being dealt by them since they have been categorized under higher tax slab in comparison to tax slab of current VAT tax regime. ‘Although the IT distributors in the capital are worried about GST implementation.

"They are lacking the information and are in need of understanding the key elements of GST and its mechanism” expressed Bidhan Das of Spectrum on the major market issue’.

Hegin Haokip of Techno Source says, ‘We are ready for GST and also doing the preparation but we are in need

of a training program on GST. So our association NECTA Is planning to take help from a banking authority or Central government for a session’. Sanjay Kumar Singh, Techweb has shared the other major issue over establishing a business in a hill station where the market is somehow depends on whether also. continuous rainfall brings

natural damages like landslide which directly effects the transport system of state which is the only life line of this trade’. Ankit Goenka of Dotcom says, ‘the trade is changing its face day by day. There is a variations in market situation if we compare it from 10 year back condition when there were no basic facilities available in the region. But we distributors wants a more concern from the state government for the betterment of IT traders’.

Ankit Goenka, DotCom

Daniel Suron Jyrwa, The Computer Store

Shalini P. Nonghlaw, Munubas Services

Sanjay Kumar Singh, Techweb

Hegin Haokip, Techno Source

IMPHAL - Manipur

Manipur is a land of many tribes and Imphal is the cultural capital of

the state and the most ancient cities in India.

Situated 786 m above sea level.

Though a small State, Manipur has made a drastic change in the field IT business.  Imphal Centre was established with the objective to provide industry standard connectivity and incubation space to the IT firms of the State. So the channel partners seems thankful to the state government for looking towards the market. In Manipur the IT business is majorly working on B2C formula Mainly Focused on normal customers. On the market issue few distributors have shared

the market situatution like this, ‘the market is waiting for GST in a hope that the situation will improve afterwards’ said Jeevan Chandra, Mangal Infotech. ‘We are on wait and watch mode for GST and expecting more reach to our product after GST implementation” John Chetri, The Computer House. ‘The payment delay from customer is the major issue for the distributors in Imphal. The downfall in business is because of the same’ said Tarun Thokhom, Info Trade Services.

Imphal Channel Partners

Dheeraj Sharma,Satyam Infotech

Sanjay Kumar Sethi, S.K.Carrying Corporation

Abhishek Jain,Sanmati Traders,

Tarun Thokhom, Info Trade Services

Jeevan Chandra,Mangal Infotech

DIMAPUR- Nagaland

Dimapur is known to be the largest and fastest growing city of Nagaland. Besides natural beauty Nagaland Handloom and Handicrafts are winning the heart of visitors.

The image in people’s mind is that the region is ridden with insurgencies, which is not the case anymore. But now the situation is different the market has grown and spread widely. Focusing on the IT business if we see the current situation of channel

partners in the region they have developed in few years with the development of technology and society.

Sanjay Kumar of Synergy systems shared, ‘initially it was not that profitable to do the business in such underdeveloped area but gradually the market got the grip and it has been many years the market is in growing mode’.

Neizulo Therie, Eastern Computer Agency says, ‘we are worried about GST implementation and also lacking the information and are in need of understanding GST and its mechanism’. Susnta Roy, Hard and Soft says, ‘Nagaland is becoming the good place for startups. Especially Dimapur is developing in the field of IT trading’.

Dimapur Channel Partners

Lalhming Thanga, Sunflower Electronic

Sanjay Kumar Kashliwal, Synergy Systems

Neizulo Therie, Eastern Computer Agency

Susanta Roy, Hard And Soft

AIZAWL- Mizoram

Aizawl is a beautiful place that offers plenty of tourist attractions to tourists and habitants alike. Besides its breathtaking beauty, Aizawl is the storehouse of all important Government offices, State Assembly House and Civil Secretariat and also the small medium IT business. Day by day the people and migrants over Aizawl are getting depended more on technology. So the demands of electronic goods has been increased in the region in last few years. If we look into the electronic goods SMBs, The distributors are getting much of

chance to expand their business.

In a conversation with DQ Channels Lalhming Thanga of Sunflower Electronic expressed that “ business in Aizawl is mostly the direct to consumers. Because in B2C we get payment on time and in B2B delay in payment occurs.

Abhishek Jain, Sanmati Traders says, ‘Because of the GST we partners are circled in a problematic situation. We have already kept much of stocks whose tax paid price will be remain in the same range. But after GST will implement the tax paid price will be changed to the consumer’.

Aizawl Channel Partners

Sanjay Kumar Kashliwal, Synergy Systems

Lalhming Thanga, Sunflower Electronic,

John Chetri, The Computer House

AGARTALA- Tripura

Agartala is one of the fastest developing cities of India and the second

largest city in North-east after Guwahati. In a bid to promote employment and e-governance, the largest hub for information technology (IT) was recently inaugurated in Agartala. It is Northeast’s sixth IT hub, which has been set up at a cost of Rs 50 crore. State’s

37 lakh population have started using mobile phones, laptops and tablets which has lead to an IT boom. With these development the IT distributors are also getting the benefit and making money. B2B is more preferable in Agartala as per the scenario. Business is more depended on commercial projects here as the growth rate is reaching

high gradually in terms of globalization. The markets demand growth is currently in average. On the other side there are some issues which needs a point of concern over the IT Business. Market is becoming wider in Tripura and the channel partners are getting involved in government and commercial projects. There is a permanent market place for Bangladeshi businessmen in Agartala. The first floor of the Mukut Bipani Bitan, a trade centre in the New Capital Complex, has been marked as Bangladesh Market. After GST implementation the IT Partners has a belief that the condition of R&D will improve. Subhash Modak of Computer Link says, ‘IT traders of Agartala is doing good

business across the country, low cash flow is a point of concern. We want NECTA to look seriously after these issues of IT trade in the area’.

Rajeev Das, First InfoTech expressed, ‘Taking decision to implementing GST is really a big relaxation to the partners like us. From first July the tax relaxation will play the vast role in upgrading the situation over the downfall led by the same governments demonetization plan last year’.

Agartala Channel Partners

Sanjay Kumar Kashliwal, Synergy Systems

Lalhming Thanga, Sunflower Electronic

John Chetri, The Computer House

Subhash Modak, Computer Link

Pankaj Datta, Datta Computers

Rajiv Das, First Infotech

Sidharth Dey, Info Solution Systems

Saikat Saha, Sigma

GANGTOK- Sikkim

Apart from the natural beauty the capital of Sikkim, Gangtok is gradually upgrading its strength in electronic goods Market. Exporters are avoiding the payment of government dues like VAT, excise duty, customs duty and sales tax. In the process, a small state like Sikkim is being denied its share of revenues and duties.

In the past three years, 2014 and 2016, the volume of export, including legal and illegal trade, has jumped manifolds. Taking advantage of the duty-free regime of the border trade, items manufactured in different parts of India are being sent to China through Nathula and a host of Chinese manufactured products are entering India. Traders from China are bringing to the Sherathang trade mart products mobile phones, and electronics goods. ‘Business growth is there but the less resources is the barrier for us. Growth of our market is indirectly based on development of the region. State government should look after the IT sector. Lack in resources is letting it down says, Anitish of

Anitish Technologies.

Ramesh singh of Ramesh & Brothers shared, ‘More involvement of association is expected. Many times we feel the drawback of being situated in a remote area.

’‘ We channel partners are excited that GST is finally going to happen. We expect the betterment in business after its implementation” he further added’.

Gangtok Channel Partners

Anitish Sharma, Anitish Technologies

Ramesh Singh, Ramesh and Brothers

NAHARLAGUN - Arunachal Pradesh

The NAHARLAGUN town is situated in the Foothills of Himalaya in the eastern most state of Arunachal Pradesh located 10 km far

from the capital city of Itanagar. The state’s economy is largely agrarian, and is still struggling with the basic resources but

quite succeeded in establishing the IT market in Naharlagun. City is counted the most developed in the state.It has also build a small IT

Market which has reach in almost every districts. There are not a huge number of channel partners playing the business but few are quite

satisfied with the growth of market. Consumer business is preferred more in Naharlagun rather than B2B. The reason behind that is less commercialization in the area and the Big industries are yet to set in the town. Gradually the small business are getting success in making their grip in market. Many of IT based SMBs are Planning to expand their market and making strategies over taking the benefit of central

governments gift of GST implementation.

Talking to DQ Channels Tapan Sarkar, Q D Enterprise says, ‘market is growing day by day and our business too. More involvement of association is expected.

Many times we feel the drawback of being situated in a remote area”.

‘IT Channel partners are excited that GST is finally going to happen. We expect the betterment in business after its implementation’ he further added. Lichi Soam of Takar Engineering House expressed, ‘Growth is there but the less resources is the barrier for us. Sometimes we suffer because of the bad weather as the transportation fully stops because of that”. ‘The Growth of our market is indirectly based on development of the region. State government should look after the IT sector. Lack in resources is letting it down’ Lichi added.

Naharlagun Channel Partners

Techi Tara, Himalaya Computers

Tapan Sarkar, Q D Enterprise

Lichi Soam, Taker Engineering House