Budget 2012: Rise in excise duty not good for consumer durable industry, says Mahesh Krishnan, Samsung India

NEW DELHI: With the Budget 2012 on Friday announcing an increase in excise duty by 2% from 10% to 12%, prices of consumer electronics like LCD TV, LED TV, air-conditioners, refrigerators, washing machine and microwave ovens are going to go up by 2-4%. This will pose a major headache for white goods companies who are fighting a slowdown in demand for the last one year.

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Commenting on the issue, Mahesh Krishnan, VP-Home Appliances, Samsung India said," The benefits announced for key sectors like infrastructure, agriculture and education are bound to improve the overall economic scenario. However, the budget does not bring any relief to the consumer electronics industry, which has been reeling under the impact of rising input costs and rupee depreciation in recent times. The rise in excise duty may lead to an increase in prices of consumer electronics products."

The other announcement - exemption of basic custom duty for LCD and LED TV panels, will have little impact since there was already nil custom duty for imports from Japan and Korea from where major companies like LG, Samsung, Panasonic and Videocon primarily source their TV panels.