Make PC more affordable

BANGALORE, INDIA: The common concern among the system integrators has been the Central Sales Tax, where as the distributors expressed their concern over the grey market.

Some with much dismay said that nothing much can be expected out of this budget.

Vendors are hopeful that duty on computers is reduced so PC becomes more affordable. "We expect standardization of Central Sales Tax (CST), which effects the industry billing.

This would help easily bill across the country and increase the trade. Currently if we buy from other states, we have to pay CST, which would add to the cost. It becomes expensive," said Madhu Madhavan CEO of Cubic Computing.

"Our aspiration is to remove the CST, or at least reduce it to 2 per cent. Currently it is 4 per cent without c form and 3 per cent with c form," he said.

Jayessh Mehta of future BusinessTech, said, "This year we expect excise duty to come down. It would help in increasing the trade, particularly it would help the manufacturers. Second, we assume that CST might come down to 2 per cent. Due to VAT, CST has to be phased out in a gradual manner. Actually it has to be abolished.

CST may be reduced in the coming budget."

Rajan Anandan, VP and country GM, Dell India, said, "All leading international and Indian brands are manufacturing computers in India, and yet imported components still form a significant part of these. High taxes on components and high excise duty on computer manufacture are the key reasons for high computer prices in the country, and that has been a key factor in India's abysmal PC penetration rate of 2.3 per cent. India is ranked as low as number 51 in worldwide PC penetration. The Union Budget can provide the much needed impetus to the industry by providing a zero tariff regime across the IT hardware supply chain, which can help India's IT Hardware industry become as recognized globally as its software and ITES industries and an important part of the global supply chain."

"These much needed changes will bring significant reductions in prices of computers and facilitate access to technology to wider sections of society and have a multiplier effect on the economy. The consequent growth in computer will need capacity enhancements resulting in the creation of several thousand jobs in India. It can also be precursor to large investments flowing in from global component manufacturers," Anandan added.

Ravi Vishwanath - CFO of Sun Microsystems, has a list of expectations in his kitty-

Direct Taxes · Due to buoyancy in tax collection, Surcharges should be removed so that the peak rate is 30% · The removal of FBT on genuine business expenses like sales promotion and travel should be considered · Transfer Pricing Regulations need to be simplified further for better administration · Impetus towards fostering R&D · The Indian Rupee has appreciated sharply over the past 12 months, thereby impacting the SME in the export sector.

It would be good if the tax holidays as envisaged under Section 10A & 10B of the IT Act is extended for a further period of 3 to 5 years, specifically this could be made applicable to Tier II/III cities ·

We would like to see an increase in 'standard deduction' for salaried employees · The threshold limit for taxation could be increased to 3 lakhs ·

In view of the outlay planned for Infrastructure projects, it may be worthwhile to create a new chapter in the Direct Tax Code to deal with such projects · All ambiguity around SEZs should be removed by initiating a dialogue between the Finance and Commerce Ministries · Above all, the simplification of tax laws should be taken up immediately

Indirect Taxes · In light of the Rupee appreciation, Service tax on 'Export of services' need reconsideration

Fiscal/Overall·

Given the fall in Global food grain production, it could be prudent to provide special packages to improve or increase food grain production in India

Execution of Labor reforms Distributors’ main concern has been the grey market. Due to high duty, consumers buy the product in grey market and its a huge loss for them.

"We expect duties to come down for memory special. Due to high duties gray market is growing and it is a loss for us. We are looking forward for the duties to be reduced for the memory products. We have to see what is in store for manufacturing sector," said Sanath Babu of Sri Durga Computech.