MAIT welcomes third stimulus package

NEW DELHI, INDIA: MAIT, the apex body representing India’s IT hardware, training and R&D services sectors, welcomed the announcement of the third package for economic stimulus by the Union Government to give a boost to domestic consumption and provide relief to the industry through four percent reduction of excise duty and two-and-a-half percent reduction in service tax.

Expressing satisfaction on the recent announcements by the government, Vinnie Mehta, Executive Director, MAIT, said, “We welcome the several proactive measures announced by the government over the last few months to sustain the growth of the domestic economy. Four percent reduction in CENVAT rate (excise duty/CVD) will help bring down the prices of IT products other than computers.

With this, hardware equipment would attract eight percent excise duty while desktops and notebooks will continue to remain at the same rate. Excise duty on desktops and notebooks was brought down to eight percent in December 2008”

Mehta added, “We are also glad that the service tax has been brought down to ten percent. This will provide some relief to local computer manufacturing industry which was under stress due to CENVAT overflow as the service tax on software was significantly higher than the excise duty on computers.”

Elaborating on the measures for boosting consumption of IT products in the country, Mr Mehta said, “Apart from fiscal measures as announced today, It should also be made mandatory for nationalised and PSU banks to earmark funds for easy and subsidised loans for purchase of IT products and solutions for the SMEs and the home consumers, especially for education.

Similarly, Governments Central and State should extend interest free loans to all their employees for purchase of IT products. Further, as several e-governance projects are being rolled out, these need to be replicated across all the states in the country and completed at an accelerated pace. Providing for local-language interface will be critical for the success of such projects, especially those aimed at Government-citizen interface.”