New Delhi: We welcome the government's decision to maintain the current excise and custom duty levels on IT products and components. The hardware industry supports long-term stability in policies and duty structures as frequent changes adversely impact the investment and business plans of the industry. Further, the focus given to education especially for the 'mission in education through ICT', increased allocation for upgradation of polytechnics, IITs, NITs is indeed very welcome. This is as suitably skilled human resource is critical to sustain the competitiveness of the IT industry in country.

We are glad that the finance minister has unveiled the roadmap for GST, which is very critical for creating a single-India market. This calls for unification of the rate on excise duty and the service tax. The service tax continues to be at 10 er cent while the rate of excise duty is 8 per cent. Going ahead, the industry expects better involvement and engagement with the government as the finer details of the GST are worked out.

The Union Budget has also addressed the issue of taxation on packaged software. The licence / right to use part of the value of the packaged software would now be subjected to service tax only and not Excise duty / CVD, this is as per the industry's recommendation. However, the issue of state governments' levying VAT on 'software' already treated as 'service' remains unresolved.

It is heartening that the finance minister has recognised the strong potential of the electronics hardware industry. In this regard, the announcement of reduction in customs duty on LCD panels and exemption of CVD on parts and components of mobile phones for manufacturing these products locally is truly welcome. However, to sustain hardware manufacturing in the country in the long run, it is critical that SAD be abolished on finished goods and components or made at par with the CST.

Some of the other noteworthy outcomes of the Union Budget 2009-10 are:

• Extension of Section 10A & 10B of the IT Act by another year. This will enhance the confidence of the IT export sector, which has been facing challenges due to the global economic crisis.
• The removal of the Fringe Benefit Tax.
• Setting up of an ''alternative dispute resolution mechanism'' for resolving transfer pricing dispute under the CBDT. This will help boost the confidence of foreign investors in the IT sector.