Consumer durables industry seeks levy reduction in budget

20 Jun 2009

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The consumer durables industry is seeking rationalisation of tax structure across the country in the coming budget plus an assurance on timely implementation of Goods and Services Tax (GST) from the next fiscal.

According to leading players in the sector the government must look for implementation of GST as promised in the previous budget to prepare a common platform for manufacturing units. They favour a tax regime under which tax boundaries would be rationalised and state sales tax is harmonised without any exception of states charging additional tax.

There exist apprehensions in certain quarters of the industry regarding the GST not being implemented as scheduled from April 2010 in view of several issues that remain to be resolved at the central and state levels.

Industry is also not happy with the customs and excise duties that it feels are high and some consumer durables manufacturers have been demanding that the excise duty be reduced from 10 per cent to 6 per cent.

Major players in the electronics consumer goods market are expecting special provision for promotion of consumer durables through lower pricing on tax cuts and other relief by way of excise duty, sales tax and abolition of octroi.

Other measures the industry has proposed include benefits for the import of conveyor systems. The Consumer Electronic Appliance Manufacturers' Association (CEAMA) has proposed that conveyor systems for assembly of electrical and electronics equipment and movement of finished goods should be attract nil customs duty.

Electronics consumer goods makers are also expect the government to reduce the rate of service tax at par with excise and implement policies to facilitate easy financing through banks for customers and small traders as it would help spur demand on competitive.

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