Karnataka taxes cost LG dear

LG Electronics's IT division lost nearly 30 per cent of its sales in Karnataka during 2004 due to high taxation prevalent in the state. This division grew more than 50 per cent in other parts of the country.

The total business opportunity lost in the state, the missed 50 per cent growth and the 30 per cent absolute fall in business, translates into business loss of close to Rs 50 crore.

Said R Manikandan, GM, sales & marketing (PC & peripherals), LG Electronics India: "The high taxation in Karnataka has cost us close to Rs 50 crore. We would have closed 2004 at Rs 800 crore but for this issue and we closed around Rs 750 crore, which is over 50 per cent growth over 2003 calendar year."

He however added that LG Electronics is not taking any ad hoc steps but is awaiting implementation of value added tax (VAT) from April 2005.

"Not only us, but a whole lot of IT vendors have lost due to the taxation issue. We could not do much to impress upon the state government to lower the tax and we eagerly look forward to VAT," he noted.

The IT division contributes around 11 per cent to LG India's turnover of Rs 7,000 crore and expects 100 per cent growth in revenues for 2005. LGEIL was recently rated No 3 in the consumer desktop segment in the Indian market by the research agency IDC in its report for Q3 of 2004.

The company also announced the launch of 16X DVD Writer and Flatron LCD monitor with f. ENGINE technology in Bangalore. According to LG India, this new DVD re-writer is compatible across most media and has a storage capacity of upto 4.7 GB of data, which is seven times more than a normal CD media and is priced at Rs 5,490.

The 17-inch Flatron LCD monitor with f. ENGINE technology is an integrated digital high-quality picture system. It consists of two processes such as Real Colour Management (RCM) and Adaptive Colour & Contrast Enhancer (ACE).

"Flatron f. ENGINE achieves high standards of performance through precise application of LG Flatron's image signal processing knowhow and through the new technology to overcome weaker points of LCD display devices," Manikandan added.