Good news for local mobile phone makers

Industry given a miss, STPI extension ignored.

Budget 2010-11 may have ignored the IT-ITeS industry, but has given a push to telecom by announcing an exemption for the domestic manufacturers of mobile phones from the countervailing duty and special additional duties (SAD).

The domestic manufacturers have been further given extension of the benefit of 4 per cent SAD exemption on mobile phone parts, components and accessories till March 31, 2011, from June 2010.

The government has also increased the outlay of the Ministry of Communications and Information Technology (IT) by 11.32 per cent to Rs 21,862 crore for 2010-11.

The Budget has ignored industry’s demand for the extension of Software Technology Parks of India scheme. Rather, the increase of the minimum alternate tax by 18 per cent from 15 per cent on book profits will result in higher outgo of cash.

The focus on e-governance is a clear positive for the industry. An outlay of Rs 3,067 crore has been allocated to the Department of IT.

For computerisation of commercial tax, the Budget has allocated an outlay of Rs 1,133 crore. Similarly, the government will set up two more centres for computerisation of the direct tax.