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New era of IT manufacturing seen

Special Correspondent

Excise on computers will facilitate local sourcing of components

NEW DELHI: The IT manufacturing industry has welcomed the announcement of a new policy for manufacturing capital-intensive hardware products such as semiconductors, assembly, testing and packaging of semiconductors, LCDs and storage devices.

"With the Indian IT market attaining global scales, such a policy announcement is timely and will usher in a new era of IT manufacturing in the country,'' noted Manufacturers Association of Information Technology (MAIT). The budget had also addressed the problem of inverted tariff structure in the computer manufacturing industry, it added.

"The imposition of 12 per cent excise duty will establish a seamless CENVAT chain for the computer manufacturing industry and facilitate local sourcing of components such as monitors, motherboards and keyboards. It will also encourage manufacturing of high-end products such as notebooks and servers," said a MAIT statement.

The industry felt that the introduction of excise duty would have minimal impact on computer prices as excise duty concessions have been extended to DVD drives, flash drives and combo drives. Local manufacturers can now offset the excise duty on spares and the service tax on services consumed for manufacturing. However, the marginal price increase in some cases would be neutralised over a period.

Earlier, computers attracted nil excise duty while 16 per cent excise duty was levied on input components.

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