Pointing out that a hike in excise duty could escalate product prices that will dampen demand, consumer durables firms today said the government should retain the stimulus package given to deal with the economic downturn.
Expressing their wishes ahead of the Budget, the firms said that even if the government was to remove the support given to the industry, it should be in phases.
"Any rollback in excise duty at this stage coupled with the rising input costs will lead to an escalation in product prices, which will adversely impact consumer demand," Samsung India Deputy Managing Director Ravindra Zutshi told PTI.
Considering the low penetration level of consumer electronics and home appliances in the country, this sector has the potential of high growth in the country, he added.
The sector expects government support in terms of excise duty and other benefits so that the country's manufacturing industry can get a boost, he added.
Apex body of consumer durables industry, Consumer Electronic Appliance Manufacturers Association (CEAMA) said that even if the government had to roll back stimulus package, it should be done in a phased manner.
"Roll back of the stimulus package should be done in such a manner that it does not impact growth," CEAMA President Yasho V Verma, who is also the COO LG Electronics India, said.
The Centre had cut CENVAT by 4 per cent in December 2008 which resulted in price reduction of consumer durables and appliances, and helped in spurring demand.
Besides this CEAMA has also sought scrapping of goods and services tax rates and rationalisation of tax structure to promote component manufacturing.
"Besides, this we are also expecting government to do something to intensify research and development activities in the segment," Verma said.
Echoing similar sentiments, Haier Appliances India President Eric Braganza said, "We also wish that tax concessions, which we received last year, stays through the new year in order to beat the growth rates reached before slowdown hit the economy."
Japanese durable maker Panasonic also said that the government should keep the low tax rates in the country.
"We would be very happy if the government retains the present level of duties in the upcoming Budget," Panasonic India Director Planning and Operations Arjun Balakrishnan said.