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MAIT outlines Budget Expectations to Boost Domestic IT Manufacturing Sector

Anwar Shirpurwala

In the wake of the upcoming Union Budget 2016-17, MAIT has highlighted some pertinent issues that need to be immediately addressed to improve the business environment in the country and to attract more investment in manufacturing of IT & electronics goods. The Apex body for IT manufacturers has proposed a set of pre-budget recommendations to provide an impetus to the IT Hardware & Electronics industry in India.

Some of the key recommendations and the impact foreseen are.

  • Extension of concessional excise and customs duty exemption benefits to all ITA¹ goods: This includes desktop, laptop computer and wired and hardware wireless customer premises equipment and e- readers. Concessional rate of excise duty (2 percent) ought to be extended bringing them at par with mobile phone and tablet computers. This initiative will boost domestic manufacturing and substitute imports with domestic production.
  • Deemed exports benefits for ITA goods: If ‘deemed exports’ status is provided to ITA bound goods it will reduce their tax burden and promote domestic hardware manufacturing.
  • Support to Small and Micro Enterprises: SMEs have to face various operational challenges in terms of regulatory issues, availability of finance, lack of infrastructure facilities and distribution networks. Apart from tax incentives, the government must provide them an exclusive online platform for buying and selling of products.
  • Formation of Convergence Cell: In order to avoid confusion in litigation and unwarranted harassment by customs officials, a convergence cell must be formed wherein classification of new IT products should be decided within 30 days of representation.

While the government has already announced a slew of initiatives to promote domestic manufacturing under the ‘Make in India’ campaign there is an urgent need to take some bold steps, says MAIT.

Anwar Shirpurwala, Executive Director, MAIT said, “We need to develop a complete ecosystem with a robust infrastructure, integrated supply chain and a regulatory framework that encourages people to invest in manufacturing. There is a need to simplify and reduce the cost of doing business in India to help domestic IT manufacturers compete with their global counterparts.

Our recommendations are in line with the government’s Ease of Doing Business and Make in India Programmes. If implemented in the true spirit, they can have a wide ranging impact on the IT hardware manufacturing Industry in the country,added Shirpurwala.

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