In its pre-budget memorandum to the government, the Manufacturers Association for Information Technology (MAIT), the apex chamber of hardware manufacturers, has called for restoration of the duty differential between components and finished products in the IT industry.
MAIT has proposed the setting up of a three-tier structure to fix the rate of duties on finished products, hardware components and hard disk drives.
The association has suggested that finished products should continue to be charged at the existing rate of 20 per cent, while duties on components like integrated circuits and semi-conductors, which are at present not manufactured in India, should be reduced to 10 per cent.
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In case of hardware components such as hard disk drives, which are unlikely to be manufactured in the country, the duty should be brought down to zero, the association has said.
MAIT has also urged a reduction in post-manufacture levies on hardware items from 15 per cent to 10 per cent as this would enable manufacturers to cut the price of computers and reduce the size of the grey market for computers.
Another proposal put forward by the association is promotion of the use of computers in the corporate sector by permitting a higher rate of depreciation for investment in information technology.