Budget suspense for hardware cos
Even as the Union Budget left existing duties on computer hardware untouched, players are now waiting for the crucial notification on retail sale price (RSP)-based excise assessment announced by the government for PCs and peripherals such as print...
By Moumita Bakshi Chatterjee, TNN |
NEW DELHI: Even as the Union Budget left existing duties on computer hardware untouched, players are now waiting for the crucial notification on retail sale price (RSP)-based excise assessment announced by the government for PCs and peripherals such as printers, monitors, keyboards, and mouse.
The price of such items may go up for the end consumer if the abatement is not in sync with the cost built-up between the ex-factory price and the MRP.
Simply put, the excise duty is currently applied on the ex-factory price. RSP-based assessment would make excise duty applicable on the price sold by the distribution channel (end-user price), which will include dealer margins.
“While there may be a potential increase in product price, although not immediately, everything depends on the abatement, which is yet to be notified. It’s early to assess the impact,” said Ravi Swaminathan, vice-president of Personal Systems Group, HP India said.
The government proposes to bring products like PC (including laptops and portable computers), printers, monitors used for automatic data processing machine, computer keyboards, scanners, mouse, computer plotter, fax machines, modems and set top boxes (used for accessing the internet and for television sets) under the new system of excise assessment.
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As of now, players such as HP, HCL, Acer and Zenith are manufacturing computers in India. PCs attract an excise duty of 12% while keyboards, monitors, mouse and printers attract 16% excise duty.Most players said the new assessment will be cumbersome given the fact that PC prices are based on different configuration unlike other consumer electronics items which are standardised and use the MRP-based assessment. The various skews that the consumer opts for while choosing a PC could make MRP-based assessment difficult to administer, said an industry expert.
When contacted MAIT executive director Vinnie Mehta said the association would wait for the fine print before commenting. “We also have to see whether the RSP assessment system works for PC products. The main concern is the quantum of excise should not lead to a Cenvat overflow,” sources said.
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