The Hindu Business Line : Tax reliefs for EoU/EHTP units — Boost to domestic manufacturing: MAIT

THE exemption of central sales tax (CST) and service tax on domestic procurement for export-oriented (EoUs) and electronic hardware technology park (EHTP) units, in the new foreign trade policy), would make the domestic manufacturers competitive, according to the Manufacturers Association of Information Technology (MAIT), the apex body representing the hardware manufacturing industry.

Mr Vinnie Mehta, Executive Director, MAIT, said, "The thrust on economic growth, national development and employment generation is indeed very heartening."

"From the perspective of the information technology hardware manufacturing industry, the exemption to the EoU/EHTP from CST on local procurement is a welcome relief. This will enable the local EoU/EHTP manufacturers to procure components and other raw materials at par with their global competitors."

Mr Mehta said the exemption from levy of service tax is heartening, as hardware manufacturing involves a significant amount of sub-contracting. The service tax was having a cascading impact on costs of a local manufacturer in an EoU/EHTP, he said.

"Some of the other measures announced by the Government such as simplification of procedures, avoiding inverted tariff structures, upgradation of infrastructural network for streamlining the foreign trade chain and exports performance-related incentives, will boost the industry morale and give fillip to exports investments," Mr Mehta added.

Mr Gopal Srinivasan, Director, TVS-E said "this well executed policy will encourage IT manufacturing in India and help us compete against global competition."

" Exemption of duties and levies on inputs will help EHTP units get fully ready for zero duty in March 2005."

According to Electronics and Computer Software Export Promotion Council, the policy has rightly emphasised the integrated approach to exports and would give rich dividend, if there were no implementation glitches.