Electronics industry demands GST from next fiscal

Industry claims present tax system hindering its progress

Stating that present tax system is hindering its progress, the electronics manufacturing industry has demanded implementation of GST in the next financial year.

"While government is making all efforts to promote the electronics manufacturing, the anomalies in tax system are resulting in slowing down our progress and having a regressive impact on the industry," industry body ELCINA's Secretary General Rajoo Goel told PTI.

"ELCINA (Electronic Industries Association of India) demands urgent implementation of GST (Goods and Services Tax), definitely not later than April, 2014," he added.

Another industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) also said GST should be introduced without any delay.

"A set-top-box maker in India has to pay VAT between 12.5 and 14 per cent when it is given to cable companies while imported STB attracts zero duty. GST will address this anomaly," CEAMA Secretary General Suresh Khanna said.

The GST, which aims at replacing most of indirect taxes, is stalled for want of political census.

CEAMA has also asked the Finance Ministry to remove custom duty on colour picture tube and LCD/LED panel below 19-inch.

Khanna said all manufacturers in the country have closed down their production lines thereby rendering 15,000 people directly and several thousand indirectly unemployed and have put about Rs 40,000 crores of banks at stake.

"This (removing duty) will help about 15 small and medium companies to start manufacturing flat panel TV (FPT) in the country and create employment opportunity for additional 10,000 people. With this, we hope about 9 million FPT will be made in 2014," Khanna said.

At present, there is 10 per cent tax on import of LED and LCD panel below 19-inch size.

Goel said central sales tax is the worst enemy of high value added manufacturing in the country. So are special additional duty and high value added tax (VAT) on raw materials,components and basic inputs, he said.

"Zero customs duty on all IT products and electronic equipment covered under various Free Trade Agreement is a given for our industry and unless we ensure that taxes are not having a negative impact on costs of manufacturing, we will not garner the benefits of the Electronics Policy," he said.

The electronics industry has received investment proposals of about Rs 75,000 crore within a year of government putting in place the National Policy on Electronics.