Info-tech

Exempt customs duty on capital goods for electronics-makers: MeitY

S Ronendra Singh New Delhi | Updated on January 12, 2018 Published on January 30, 2017

Ministry’s Budget wishlist seeks changes to import duty structure

The Ministry of Electronics and Information Technology (MeitY) has made its own pitch list of proposals to the Finance Minister Arun Jaitley to be included in the Budget. The proposals include exemption of all capital goods for electronics from basic customs duty (BCD) and countervailing duty (CVD).

The recommendations were sent to the Finance Ministry recently, sources close to the developments told BusinessLine.

“In order to increase the competitiveness of the Indian electronics industry by offsetting disability costs in domestic manufacturing to a certain extent, it is recommended that all capital goods for electronics industry to be exempted from BCD and CVD,” a government official said.

He said specified capital goods for the manufacture of electronic goods are exempted from BCD, but there is hardly any domestic capital goods industry for manufacture of electronic goods and these are largely imported — being very specialised equipment with limited number of global suppliers.

MeitY has also asked for rationalisation of inverted duty structure on the raw materials/ inputs for the manufacture of LCD/ LED panels and may be permitted at zero per cent BCD, subject to actual user condition.

Differential duty

It has asked for extension of differential duty dispensation to personal computers and servers too, as per the Phased Manufacturing Roadmap worked out by MeitY in consultation with NITI Aayog.

The differential duty dispensation is available to mobile handsets, tablet computers and specified customer premises equipments and MeitY has asked it to be continued under the upcoming GST regime as it would be a key requirement to continue and further accelerate the growth momentum.

The IT Ministry has also asked for extension of research and development benefit under Section 35 (2AB) of the Income Tax Act of this is that the unit availing this benefit should have in-house manufacturing capability.

“In the electronics and IT sector, the technology is encapsulated in software and design. Therefore, it is recommended that software products and chip design companies should be allowed the benefit of Section 35 (2AB),” the official said.

This would provide boost to intellectual property generation in the country, he added.

Published on January 30, 2017

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