Implement 4% VAT on all electronic components and assemblies, says FICCI
February, 18th 2012
Following are the key recommendations necessary for revival and healthy growth of the electronics components and equipment manufacturing sector:
>> Zero duty on all inputs for manufacture of electronic components and parts, including dual use inputs; necessary to avoid inverted duty.
>> Implementation of GST expeditiously with 12% GST.
>> 4% Vat on all electronic components and assemblies as these are industrial inputs.
>> In case of any delay in implementing GST, Zero CST on electronics value chain be made applicable.
>> 10% Excise Duty should be retained, considering the fragile global economic recovery.
>> 4% SAD should be abolished.
>> Finished electronic equipment import should be subject to at least 5% Customs Duty to encourage local manufacturing.
>> Mandate local content in key sectors such as telecom, rural IT infrastructure, e-governance projects (similar to 30% under DOFA in defence sector) and in special giveaway schemes such as the Tamil Nadu Government scheme of donating TVs.
>> No need to include electronic components and parts in any future FTA's.
>> Streamline excise procedures on import of inputs/raw materials for electronic components at 0% to equate with import of finished components without any procedural hassles.
>> Policy for encouraging local manufacture of champion products such as CFLs, Solar Lighting, Mobile accessories (Chargers) etc. Simple products required in large quantity with high employment potential.
>> For Electronic Components and Parts that have high value addition - Allow manufacturers to retain Excise Duty paid through PLA as interest free loan for 5 years.
>> Promote hardware manufacturing zones - clusters.