MAIT’s budget proposal for competitive industry

By : |January 9, 2002 0

BANGALORE: MAIT has recommended that the Government take a wholesome view of the entire
situation while formulating the forthcoming Union Budget 2002-03. For the
hardware manufacturing industry to remain competitive, the Government needs to
adopt the following measures:

Implementation of the IT Agreement in 2005 as per India’s commitment to the

The Industry will not be able to survive should the implementation be brought
forward to 2003 as announced earlier by the Government. Further to rectify the
inverted tariff structure, it is recommended that there be

– NIL customs duty on all Capital Goods for IT/Electronics/Telecom
– NIL customs duty on all input raw materials and components including dual
usage items.

Special Scheme for the Hardware Sector:

For purposes of ease of implementation of NIL customs duty on Capital goods
and input raw materials including dual usage items, a special Domestic Tariff
Area (DTA) scheme should be announced for the Hardware Sector as list based
exemption may prove to be tedious. It is recommended that the scheme have the
following provisions:

– NIL Customs Duty on all Capital Goods
– NIL Customs Duty on all input raw materials/components including dual usage
– Sales in the DTA on payment of all existing duties.
– No Net Foreign Exchange Positive (NFEP)/Export Performance condition.
– NIL corporate tax for 10 years
– All existing units should be allowed to freely convert to the new Scheme.
– Ministry of Communication and Information Technology to be the Nodal Agency
for implementation of the Scheme.

As an alternative, the Government may consider modification of the EHTP scheme
on lines of the recommended salient features for the Special Scheme.

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