The Hindu Business Line : Duty cut to make LCD TVs cheaper

But, the Customs duty reduction of 5 per cent on LCD panels will certainly see cheaper TVs as manufacturers avow that they will look at reducing prices soon.

Mr Amitabh Tiwari, Business Group Head, LG Electronics India Ltd, said, “Effective July 1, we had increased our LCD prices by almost 5 per cent. With the customs duty reduction, we intend to pass on the benefit to the consumer by rolling back the recent price hike.”

A view endorsed by Samsung India’s Deputy Managing Director, Mr Ravinder Zutshi, as well.

“We welcome the initiative of the Government to bring down the customs duty on LCD panels from 10 per cent to 5 per cent. This should result in bringing down the manufacturing costs of LCD TVs in the country and further fuel the growth of this segment.

“We also welcome the abolition of FBT which should help companies in terms of the consumer promotions that we extend for them.”

However, as far as excise duties are concerned, Mr Zutshi said that the durables sector is largely unimpacted, since the Government had already reduced the excise duty to 8 per cent in February this year.

LG’s Managing Director, Mr Moon B. Shin, is also of the opinion that the decrease of customs duty on LCD panels from 10 per cent to 5 per cent will enhance the market for LCD TVs.

Mr Shin said that the announcement of Goods and Service Tax (GST) with effect from April 1, 2010, will bring about a phased change on the tax equitably between manufacturing and services and will accelerate competitiveness.

Also, Mr Shin pointed out that the ‘allowability’ of expenditure on in-house R&D at 150 per cent to all manufacturing entities will encourage technology development and will reduce the import of know-how.

Mr Pranay Dhabhai, COO, Haier India, said that it’s a positive budget.

“In our sector particularly, the reduction of customs duty will encourage larger number of players to set up operations in India.

“Currently, most LCD panels are imported as completely built units or semi-knocked down units. It is too early to say if we will effect a price cut or not. There has been no change in the excise duty, which in our opinion, is big relief to manufacturers.”

Ups & downs

Mr Rajoo Goel, Secretary-General, ELCINA, said the electronic component and hardware industry is plagued with lack of investment.

To resolve this situation, there is an urgent need for reducing input costs and the industry needs a strong and clear direction from the Government, he said.

“The Budget has some positives such as abolition of the FBT and retaining the excise duty at 8 per cent which has encouraged industry and reduced the grey market.

“Also CST was expected to be reduced to one per cent this year but the Budget is silent on this. This is a negative development as even one per cent cost of a regressive tax like CST is a big burden on a fiercely competitive industry. The industry is disappointed at the lack of support to encourage high value added manufacturing and investments in electronic components and hardware.”

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