PCs to cost less

THE CONSUMER

PC's Budget has been good for PCs and other hardware. P Chidambaram's Budget makes personal computers virtually tax-free, with the excise being reduced from eight per cent to zero. The only thing inflating costs will be local levies.

While most players agree that price cuts are on the anvil, they disagree on the extent of the cut. ]

This, they say, is because of the excise reduction getting adjusted against the unclaimed Modvat of the components that go into making the finished product.

The minister has also exempted specified raw materials used in the manufacture of parts of cathode ray tubes and specified capital goods for the manufacture of mobile handsets and plasma display panels from excise duty.

However, it was not just technology on the minister's duty chopping agenda. Excise relief was also provided on LPG gas stoves bearing maximum retail prices (MRP) up to Rs 2000 while footwear with MRPs up to Rs 250 and writing instruments up to Rs 200 were among the beneficiaries.

The minister also did away with the mandatory excise duty on pure cotton, wool and silk, in the form of fibre, yarn, fabric or garment.

The excise duty on amusement rides has also been cut from 20 per cent to 10 per cent.

But there's bad news as well. The increase in service tax from eight to 10 per cent will make many things costlier. The scope of the service tax has been extended to life insurance services to the extent of the risk premium, business exhibition services, airport services, services provided by transport booking agents, transport of goods by air, survey and exploration services, intellectual property services other than copy right, pandal and shamiana contractors, and outdoor caterers and construction services in respect of commercial or industrial constructions.

Excise duty has been levied on contact lenses and playing cards. Duty has also been increased from 8 per cent to 16 per cent in vacuum flasks, plastic insulated ware, scented supari, prefabricated buildings, laboratory glassware, black and white television sets, populated PCBs, candles and parts of clocks and watches.