Business Daily from THE HINDU group of publications
Thursday, Nov 09, 2006
ePaper


News
Features
Stocks
Cross Currency
Shipping
Archives
Google

Group Sites

Info-Tech - Hardware
Industry & Economy - Taxation
Web Extras - Industry Associations
MAIT seeks central sales tax removal

Priyanka Vyas

Submits proposals to Govt to make sector competitive

New Delhi , Nov. 8

In a bid to make the electronics industry more competitive, the electronics and hardware manufacturer associations have proposed a slew of recommendations including removal of central sales tax (CST) on all electronics hardware, 4 per cent VAT across the board on entire hardware chain, removal of distinction between IT and non-IT for domestic taxes and levis and allowing 100 per cent domestic tariff area (DTA) access to all electronics hardware products.

It has also asked for five per cent interest subsidy of Rs 600 crore per year and income tax exemption on all electronic hardware units for 10 years.

Industry bodies are of the opinion that as a result of CST, local manufacturers were being rendered uncompetitive since imports were being cheaper under the Information Technology Agreement (ITA) of the WTO to which India is a signatory.

Talking to Business Line, Mr Vinnie Mehta, Executive Director, Manufacturers Association of Information Technology (MAIT), said, "Single biggest challenge of IT industry is the issue of CST. Since the industry has zero duty structure under the ITA, local taxes are the biggest concern. CST makes local sourcing of components more expensive vis--vis imports. The Government has announced a roadmap for this, under which it would reduce one per cent of duty every year. However, the IT industry must be considered as a special case, and instead of reducing it in a phased manner, it should be brought down at the earliest."

MAIT has emphasised complementing software development with strong R&D in hardware for Indian companies to become competitive in the global market.

Under the proposed recommendations submitted recently to the Department of Information Technology and the National Manufacturing Competitive Council, the industry chambers have sought the above recommendations. "We have just submitted these proposals and electronics hardware being the single largest sector, India must take all measures to promote it," said Mr Deepak Puri, Moser Baer, who chairs the electronics hardware committee of the CII.

"The proposal is also likely to be discussed at the joint Indo-US ICT conference in December to further understand the needs of the sector," added the CII Chief Information Officer, Mr Vikram Tiwathia.

Industry bodies estimate that adopting these recommendations would create a growth rate of 32 per cent in the hardware market by 2010 and achieve a market capitalisation of $85 billion. This would contribute $ 11.06 billion indirect revenue and $1.29 billion direct revenue. Over the next 10 years, electronics hardware production would contribute to 12 per cent of GDP, creating an employment of 7 million directly and 14 million indirectly.

At present, India has 0.7 per cent share followed by Thailand at 1.4 per cent, Taiwan at 3.5 per cent, South Korea at 7.2 per cent, Germany at 12.1 per cent against China, which leads with 14.6 per cent share in the global production.

The chamber believes that the policy would help India address the problem of trade deficit, of which 30 per cent is due to electronics hardware.

More Stories on : Hardware | Taxation | Industry Associations

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page



Stories in this Section
Cricinfo relocates global HQ to Bangalore


ADS issue: Infy may face challenge luring retail investors
Megasoft bags MTNL order
e-Serve is now Citigroup Global Services
Next Gen to enhance BPO operations
Reliance Comm to launch video streaming service today
Nokia sees big scope in India
Hutch launches calling cards
CDMA operators seek licence fee cut
Centre to go slow on IT SEZ approvals
MAIT seeks central sales tax removal
LogicaCMG opens new unit
Oracle to extend CRM to small, medium businesses
Wipro unveils programme for US health plans
Financial Tech's M&A plans
.IN domain records 2 lakh users
TCS buys Australian co for Rs 50 cr
Accel close to acquiring Chennai co
TRAI office sealed in Delhi
VISaer, IBS Americas in pact for offshore service
Bharti Airtel signs MoU with Adani Group
Amtex opens centre in Delhi
Malaysia woos Indian IT investors
CSS Soft sets up Hyderabad centre
McAfee's new Web safety tool
Chinese cos Huawei, ZTE bag major orders from telecom PSUs
Bridging more than the digital divide
Anthapur new Yahoo! India COO


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | The Hindu ePaper | Business Line | Business Line ePaper | Sportstar | Frontline | The Hindu eBooks | The Hindu Images | Home |

Copyright 2006, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line