Tax hurts, not customs: MAIT

BANGALORE: "Customs duty is no longer the issue. The tariffs for customs is 15% now, will be reduced to 10% next year and the 2005 budget time will find it on the zero scale. The problem for the IT hardware industry remains domestic tariffs," said Vinnie Mehta, Executive Director, MAIT.

Speaking at the information technology session of the India US High Technology Co-operation Group’s second industry meeting held here on Wednesday, Mehta said that almost 32% of cost is added to products due to domestic tariffs, including excise duties, sales tax, turnover tax and others. He reiterated that it was important for the government to realize the price sensitive nature of the technology that was being dealt with and work to bring down the incidence of domestic tariffs.

In defense of the statement, a representative of the Ministry of Finance from the audience said that the industry should give consideration to the $20 billion in revenue that the government made every year from excise collection, and consider ways of replacing that loss if excise is removed. He added that the nationwide implementation of VAT, which might be implemented from April 1, 2004, will do away with most of the problems with domestic tax.

The importance of bringing in manufacturing by MNCs to the country and how that is possibly only by achieving scale in the domestic market which in turn was related to the tariff structure, were other topics touched upon during the discussion.

"Today’s venture capitalism does not allow for gestation. You either have to be billionaires within a year or you are not worth much. That kind of attitude puts an immense amount of pressure on the scientist to deliver. And nanotechnology is no different," said Dr Rudra Pratap, Associate Professor, Indian Institute of Science (IISc)

"In the next five years, nanotechnology alone will need close to 1 million trained people. The only way to meet that kind of manpower needs is to make a concerted effort as a group. Additionally, academia has to look at bridge programs, between education and industry, to provide adequate training for people interested in nanotechnology," he added.

Speaking on nanotechnology as a fast emerging technology during the session, other speakers discoursed on the areas in which the particular technology would be of great use to India including agriculture, power and healthcare.

(CNS)