Maran assures support to hardware industry in new trade regime

Hyderabad | Updated: Nov 29 2004, 05:30am hrs
Union information, communication and technology (ICT) minister Dayanidhi Maran on Saturday assured the hardware industry that all the issues related to tax, the implications of value added tax (VAT), inverted duty structure on imported hardware (electronic goods) will be addressed at the earliest in consultation with the Union finance ministry.

Expressing his solidarity with the hardware industry, represented by MAIT, ELCINA, TEMA, CETMA, ELIAP, and Confederation of Indian Industry, Mr Maran said that the ministry will standby with the sector and ensure that all the problems and issues are solved amicably at the earliest to take on the threat in the post-World Trade Organisation (WTO) regime.

In a hurriedly arranged valedictory address of the two-day e-Hardware 2004 summit in Hyderabad, Mr Maran told the officials of hardware associations through a video conference from New Delhi on Saturday that the ministry will fight and see that the hardware industry is not affected due to the WTO or VAT regime.

Further, the minister said that the secretary of department of IT has already started discussing with various associations on issues deliberated at various platforms. It is time to really take off, he said.

Mr Maran also asked the associations to formally send a memorandum to the ICT ministry in this regard.

According to the associations, some of the major issues include the inverted duty structure post-April 2005 on equipment to be rectified (entire value chain to be made zero duty), reduction of excise duty by 50% of prevailing rate for all domestically produced items, encouraging speedy clearance of imports and exports, introduction of green channel passbook system.

The associations also sought rectification of sales tax disparity in the zero duty regime on domestic production against imports, income-tax rebate on R&D expenditure upto 150%, implementation of provisions in the national telecom policy which provides incentives to operators for use of domestic equipment and provision of mandatory technical specification approval for all telecom equipment deployed in India.

Earlier, citing the CII-McKinsey, MIT (ministry of IT), NASSCOM, MAIT reports to Mr Maran, chairman of CII (AP Chapter) Ramesh Datla, said that total requirement of hardware and components by 2008 will be in the range of $160 billion, while the investment required in the manufacturing facilities will be around $16 billion. He also said that to achieve the software exports of $87 billion by 2008, the hardware requirement would be $50 billion.