White goods, electronic items set to get cheaper
Consumer durables like television sets and washing machines and hardware items like personal computers are likely to gain from Sunday’s tax breaks announced by the government, reports Ruchi Hajela.india Updated: Dec 08, 2008 22:13 IST
Consumer durables like television sets and washing machines and hardware items like personal computers are likely to gain from Sunday’s tax breaks announced by the government, with scope for price reduction or stability after cost increases resulting from a stronger rupee and costlier raw materials.
However, television set-top boxes may not be able to pass on tax break benefits, say industry executives.
After close to two consecutive quarters of price increases, durable makers are ready to relent and roll back prices. The 4 percentage point reduction in the Central value-added tax (Cenvat) to 10 per cent from 14 per cent is the key driver.
Videocon is expected to cut prices within a week.
“Barring cooling products like refrigerators and air conditioners, consumers can expect a price reduction across products,” said P.K. Gupta, chief financial officer Videocon group.
Ravinder Zutshi, deputy managing director at Samsung Electronics, said his company will not increase prices, but was still pondering price cuts.
“We are working out details on how much benefit we can pass on to the consumers,” Zutshi told Hindustan Times. The Manufacturers Association of Information Technology said it expected price gains for hardware customers.
Jawahar Goel, manging director, Dish TV, said direct-to-home (DTH) broadcasters were constrained.
“The tax burden goes as high as 40 per cent and includes service tax, entertainment tax, VAT, licence fee where as no other services are burdened with these many taxes,” he said.