Budget 2011: Duty on parts will make PCs costlier

BANGALORE: PC costs will go up, but whether manufacturers will absorb that cost or pass it on to the consumer is not clear yet. The cost increase is on account of the 5% excise duty that has been imposed on major PC components.

These components include microprocessors, DVD writers, CD writers, floppy disk drives and flash drives, all of which were previously exempted from excise duty. These components together account for 30-40 % of the cost of a PC.

S Rajendran, chief marketing officer of Acer India, said cost would most likely go up for manufacturers, but the extent of the cost increase would depend on how much of the excise duty increase can be offset by taxes paid previously in the manufacturing process.

Some of the components may be eligible for such offsets, and that would be clear only from the budget details, which manufacturers have not got their hands on yet.