MAIT asks for duty relief, export sops to boost electronic manufacturing
New Delhi: IT hardware industry body MAIT has asked the government to consider giving duty relief and export sops to boost the domestic electronic manufacturing sector. MAIT, which represents the over USD 13 billion Indian IT hardware manufacturing industry, met the Prime Minister in January and following a meeting with PMO officials submitted its recommendations earlier this month.
The industry body informed the Prime Minister that its members have already invested over USD 2 billion in ICT manufacturing facilities across India and are looking to attract more investments. Urging the Prime Minister to consider the recommendations, MAIT said it will continue to actively engage and jointly work with the government towards making 'Make In India' a success. While commending government's efforts in the last Budget to address the "inverted duty" structure, MAIT Executive Director Anwar Shirpurwala said only partial relief has come to the industry in limiting exemption from levy of SAD to inputs/components used in the manufacture of PCs (laptops/desktops) and tablets.
"It is suggested that benefit of SAD exemption may be extended to all goods (including inputs, components and accessories and their parts and sub parts) when imported for use in the manufacture of ITA (information technology agreement) goods," he told PTI. Drawing attention towards growth of mobile manufacturing in India following various government incentives, especially reduction of excise duty, Shirpurwala said bringing down excise duty for ITA goods (like hard drives, CD ROMs, etc) across the value chain will help the IT hardware industry. He suggested that: "Excise duty may be kept at 1 per cent, wherein manufacturer cannot avail any Cenvat Credit and 12 per cent Excise Duty wherein Cenvat Credit can be availed."
The incentive will not impact government's revenue as none of the components are under zero per cent duty and the government will be assured of fixed revenue of 1 per cent on the transfer price, he added. MAIT said the 1 per cent duty benefits across the value chain will help fuel growth of the eco-system from the OEMs (original equipment manufacturers) to component manufacturing industry. Though growth of component industry may not be instant, it will be in a phased manner over a period of 3-5 years at 20-30 per cent annually and will fuel huge economic activity in the country, it added. MAIT also asked the government to provide more export incentives to attract firms to invest in manufacturing in the country. India's proximity to markets in Middle-east, Africa and Eastern Europe make it logistically superior location to other parts of Asia. This when combined with the provision of export incentives, makes India a more competent hub for manufacturing than other parts of Asia, it added.
