In his Budget speech, Finance Minister Arun Jaitley proposed removal of 4 per cent special additional duty (SAD) on PC components and imposition of education cess on imported electronic products to spur domestic manufacturing.
"I propose to fully exempt all goods, except populated printed circuit boards for use in manufacture of ITA bound items from SAD and reduce the SAD on imports of certain other inputs and raw materials subject to actual user condition," Jaitley added.
Consumer Electronics and Appliances Manufacturers Association (CEAMA) President Manish Sharma said introduction of the much awaited GST from next year, which is aimed at rejuvenating the industry, will mitigate cascading and double taxation in a major way and pave the way for a common national market, making manufacturing more competitive.
"Phased reduction in Corporate Tax, reduction of basic customs duty on 22 items and a reduction in tax on Royalty will encourage indigenous manufacturing and technology proliferation thereby supporting the 'Make in India'" Sharma, who is also the MD of Panasonic India & South Asia, added.
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MAIT is the apex body representing India's IT hardware, training and R&D services sectors.
Babu, who is also the Managing Director of Lenovo India, added that the capacity utilisation of existing facility could have been improved, if the right enabling structure for local PC manufacturing was in place.
The removal of customs duty on components and concessional structure of 2 per cent without CENVAT credit are positive steps to encourage tablet manufacturing in India, Babu said.
Research firm Gartner India Country Manager (Research) Partha Iyengar said the reducing the tax on R&D and innovation investments to 10 per cent is a very positive move, both from the point of view of facilitating technology transfer as well as encouraging companies to invest more in driving innovation.