MAIT hails removal of excise duty on microprocessors & storage devices
By Our Corporate Bureau | 19 Jan 2004
The
measures announced today were in addition to those announced
8 January 2004 which included across the board removal
of special additional duty (SAD), reduction in excise
on computers to 8 percent from 16 percent and reduction
in the peak rate of customs duty to 10 percent from
15 percent.
Congratulating
the Union Government, Mr Vinnie Mehta, executive director,
MAIT said, "The Government has rectified major
anomaly that had occurred due to the recent reduction
in excise duty on computers. This reduction was limited
only to finished systems and not extended to input parts
and components, which resulted in CENVAT credit overflow
for the PC manufacturers and rendered PC manufacturing
unviable."
With
the anomaly now rectified, PC manufacturing will thrive
and PC price reduction to the order of 10-12 percent
can be expected. This will also mobilise consumption
of peripherals like monitors, printers, motherboards,
etc. where there has been no excise reduction and their
prices are expected to remain at the same levels.
Further,
the Government has taken a significant bold step to
facilitate
the migration of the grey market to the organised market
by reducing the excise duty on storage devices and microprocessors
to Nil, he added.