Imported PCs may be cheaper by 5%

Imported PCs will be cheaper by about 5% following the Budget proposal to abolish the customs duty on ITA-bound items, while the domestic PCs could become slightly dearer.

Imported personal computers, and notebooks will be cheaper by about five per cent following the Budget proposal of the Government to abolish the customs duty on ITA-bound items, while the domestic PCs could become slightly dearer.

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"The import of finished goods such as PCs, Notebooks, servers is likely to be cheaper by about 5 per cent. However, the locally manufactured PCs will be slightly expensive," Vinnie Mehta, Executive Director, MAIT, said.

Individual companies were, however, not willing to comment on the impact as they said they would wait for the fine printing of the Finance Bill.

Mehta said Government had addressed the problem of inverted tariff structure in the manufacturing of ITA (Information Technology Agreement) products and the four per cent CVD will provide the level-playing field against direct imports.

Further, the introduction of additional 4 per cent CVD will provide a level-playing field to the local IT manufacturers against direct imports. However, in case of the PC industry, this would have been advantageous, if it were applicable only on finished products and not on imported input components.

Currently, with no excise duty on the finished PC, this would lead to still additional CENVAT overflow and a local manufacturer will have to absorb the additional CVD on inputs, added Mehta.

Hence, the prices of Desktop computers manufactured in India will increase slightly. However, fully imported peripherals, notebooks, servers etc will be cheaper by 5 per cent, added Mehta.

Manufacturers of ITA products can now import input raw materials, parts, components and other dual-usage items not covered in the IT Agreement at nil customs duty, on the basis of end-use certification, he said.