The Hindu Business Line : Maran to take up excise issue with FM

Caught between efforts to increase IT penetration in the country and the potential counter-productive implication of the excise duty levy on packaged software, the Minister for Communications and IT, Mr Dayanidhi Maran, today sought to reassure the industry that he would take up the issue with the Finance Minister.

"The industry has brought the issue to our notice. We will be representing the issue to the Finance Minister. I am sure he would accommodate us," Mr Maran said reacting to the concern over the new excise levy.

The software industry has expressed apprehensions that the 8-per cent excise duty on packaged software sold over-the-counter would not only increase the cost of such software but also encourage piracy in India.

Rules out re-look

Mr Maran categorically ruled-out any re-look at the 12 per cent excise duty on finished product (computers). "It was a demand from the industry and we represented this demand to the Finance Minister. We want to promote indigenous manufacturing. Earlier, we had a situation where imported computers were cheaper than the PCs manufactured in our country. We want indigenous manufacturing to happen and we are happy that the 12 per cent excise duty would put the imported PCs on a par with domestic PCs."

Mr Maran also sought to allay fears of any upward spiral of PC prices, saying, "Do not worry... the demand will take care."

The Budget had left the industry divided over the impact of 12 per cent excise duty on computers, with players such as Zenith, Acer and H-P predicting about five per cent increase in prices of PCs and notebooks, even as HCL and hardware association, MAIT, insisted that the prices would by and large remain stable.

While H-P had said it would raise the price of its desktops by 3-5 per cent and notebook computers by 5 per cent, Acer had estimated a 4-5 per cent price rise for desktops and six per cent for notebooks.

The imposition of excise duty would lead to a 5-8 per cent increase in the PC prices, feels Zenith Computers' chief.

"The players will not be able to set off the new levy," Mr Raj Saraf, Chairman and Managing Director of Zenith Computers had said.

Mr Maran on Wednesday welcomed the announcement on viability gap funding window for the semiconductor projects.

"Our Ministry put forward the idea to manufacture not just semi-conductors but all high-tech IT products like plasma, LEDs and OLEDs and duty cuts for CD and DVD-Roms. We see the window to manufacture semiconductors in India. We are already working on the policy. It is now a matter of weeks," he said.

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