MRP-based taxation introduced for IT products

NEW DELHI: The government has introduced Maximum Retail Price based taxation for various information technology related products, including computers, modems and set-top boxes.

The excise duty on various IT-related items will be levied on the basis of retail sale price with effect from tomorrow, a Central Board of Excise and Customs (CBEC) notification said while announcing the abatement rates for various items.

Currently, the excise duty on various IT related items is levied on the basis of transaction price of items, ranging from 12 to 16 per cent.

The industry, however, could not tell whether the introduction of MRP-based taxation would make computers, modems and set-top boxes cheaper.

The abatement rates for printers, ink cartridges, modems, keyboards, mouse, monitors has been fixed at 25 per cent of retail price, set-top boxes (for gaining access to Internet and for television) at 24 per cent and personal computers at 22.5 per cent.

These rates were decided by the abatement committee, after consultation with various chambers and associations, industry sources said.

Under the new system, the duty on IT products would be levied on retail price after deducting the permissible abatement.

The abatement, according to industry sources, is usually allowed to take care of margins which are paid to dealers and retailers.