CONSIDERATIONS WHILE BUYING

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CONSIDERATIONS WHILE BUYING Powered By Docstoc
					               INTRODUCTION
Consumer Durables manufacturing sector plays an important role
in the economy of the Nation. It contributes more than 5.5% to
the Index of Industrial Production. It is an employment
intensive sector. For every one direct job that is created in this
space, about three indirect jobs are created.

This sector has been the engine of economic growth for Japan
post Second World War, then Korea in 1980s, 1990s and now
China & South-East Asian Countries in the 21st Century.

Considering the low penetration level of       the Consumer
Electronics and Home Appliances in the country, this sector has
immense growth potential.
RECOMMENDATIONS
CUSTOMS DUTY ON DVD WRITERS & PARTS
       (HSN : 84717090 & 84733099)

 DVD Writers are exempted from Customs and Excise
  Duty but its parts attract Duty.
 This is an incidence of Inverted Duty Structure.
 We recommend that the parts of DVD Writer should
  also be exempt from Customs Duty.
 This will remove the duty disparity and non-viability
  in manufacturing.
SPECIAL ADDITIONAL DUTY ON IMPORTS (SAD)

 Manufacturers who are selling items after imports have to
  submit a refund application complying with all rules specified
  under 102/2007 for claiming refund which is cumbersome and
  lengthy and takes a year.
 SAD is exempted on goods which are imported for retail sale.
  And for manufacturers CENVAT credit is available.
 Manufacturer is also paying Sales Tax on end products and on
  the other side there is huge accumulation of CENVAT credit.
 We recommend that SAD should be abolished as it is not
  generating any revenue for the Govt. This will reduce
  transaction cost for manufacturers.
       CUSTOMS DUTY ON GSM PARTS
             (HSN : 85177090)

 GSM parts are exempt from Customs Duty under
  23/2010 and 20/2006 under IGCR conditions for
  manufacturers of GSM phones.
 We recommend that the IGCR condition applicable on
  GSM parts should be removed to encourage
  competitive manufacturing. This will improve
  manufacturing viability. Import dependency will
 reduce thereby inviting more manufacturing facilities.
    ABATEMENT ON REPAIR AND MAINTENANCE
               (SERVICE TAX)
 Abatement is not available on Management of Repair &
  Maintenance Services (U/s 65(105)(zzg) of Finance Act) for
  use of parts / components for composite contract in case of
  Repair & Management Service.
 Consequently, Service Tax is charged on the whole contract
  value which includes both parts and labor.
 Based on historical evidence, 30% of a typical Annual
  Maintenance Contract (AMC) is attributable to material and the
  balance 70% to labor.
 We recommend that Service Tax should be collected on 70% of
  the AMC Value, and applicable VAT should be charged on the
  balance 30%.
          IMPORT DUTY ON SET TOP BOX
                (HSN : 852871)
 Currently, of the 10 Million Set Top Box (STB) market, about
  80% is being met through imports.
 Domestic manufacturing units like Videocon, Dixon & Kortek
  have come up in the country supplying about 2.40 million
  STBs per annum.
 We recommend that the Customs Duty on Set Top Box should
  be increased from the current 5% to 10%. This will give a
  boost to domestic manufacturing which has been struggling
  against cheap imports.
          CONCLUSION
If our recommendations are accepted, it will
result in growth of demand in our sector.
Manufacturing will get a boost and will
generate more revenue for both Union as well
as State Governments.

              THANK YOU

				
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posted:9/2/2011
language:English
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