Brand counts

Calcutta, March 1: Branded desktop PCs will cost less, while assembled ones will be more expensive.

Finance minister P. Chidambaram yesterday addressed the anomalies arising from an inverted duty structure by bringing down customs duty of 217 items under the IT Agreement (ITA) to zero from March 1. The same is also applicable to all manufacturing inputs for any item under the ITA.

However, to provide a level-playing field to domestic manufacturers, the minister also announced the introduction of a 4 per cent countervailing duty (CVD) over and above the existing one of 16 per cent on ITA products.

Currently, there is no sales tax on direct import and the value-added tax (VAT), which will be effective from April 1, will not cover these items.

Vinnie Mehta, executive director of MAIT, an apex body for the hardware industry, said, ?The new structure will benefit manufacturers of products under the ITA. However, in case of the PC industry, this would have been advantageous if it was applicable only on finished products and not on imported input components. Now, with no excise duty on the finished PC, this would lead to an additional Cenvat overflow and a local manufacturer will have to absorb the additional CVD on inputs. Hence, the prices of desktop computers manufactured in India will increase slightly. However, fully imported peripherals, notebooks and servers will be cheaper by 5 per cent.?

Xenitis director Sanatanu Ghosh said, ?The increase in CVD will be offset by the excise exemption that manufacturers can avail of.?

Xenitis sells PCs under the AmarPC brand.