With higher duty, computer accessories set to cost more

Shishir Sinha New Delhi | Updated on January 23, 2018 Published on May 17, 2015


Parts imported for loose sale will attract 12% duty

If you plan to buy an external memory storage device for your computer, get ready to pay more as it will attract higher duty now.

The Finance Ministry has notified changes in user conditions for various computer parts and accessories to facilitate “Make in India”, among other purposes.

“The concessional excise duty (and hence CVD or countervailing duty) of 6 per cent on Hard Disk, CD Rom drive, DVD drive or writer, combo drive, flash memory, microprocessors has be restricted only to actual users for manufacturer of computer (PCs/Desktops),” a letter written by Alok Shukla, Joint Secretary (Tax Research Unit-I) in the revenue department, to all tax officials says.

The letter talks about various changes made in indirect taxes (customs and excise duty and service tax) in the Finance Bill, which came into effect from midnight of April 29-30.

Various computer parts and accessories are brought into the country mainly for two purposes-loose selling and for use in assembling or manufacturing a computer.

To promote information technology, these parts attracted CVD (levied on imported products in lieu of central excise duty) at the rate of 6 per cent.

“Now, at the time of bringing in parts for assembling or manufacturing computers, the duty will be 6 per cent, whereas in other cases, it will be 12 per cent,” a tax official said. This means that a hard disk, CD Rom drive, DVD drive or writer, combo drive, flash memory or microprocessors brought in to be sold loose, will attract higher duty.

“Even if computer-makers offer any of these components as add-on and outside the product, they will attract higher duty,” he said.

The official said the duty differential will prompt people to get registered as manufacturers. “Many people are involved in assembling computers without registration.

“They had no problem in availing components at concessional duty as no user condition was attached, but this was affecting the business of organised computer manufacturers,” he added. Manufacturing or assembling without registration is also not good for the government, as it does not get duties that it gets from registered manufacturers.

It is not good for consumers, too, as guarantee and after-sales services are elusive on such products, the official said.

Published on May 17, 2015
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