It's that time of the year again when businesses, in the case of consumer technology, hope for revision in custom duties, tax reforms, and more. The consumers, in turn, hope to be able to purchase their dream gadgets at a more attractive price tag.
Yes, Budget 2009 is impending and consumers are eagerly awaiting it. There are expectations, speculations floating in the air. For instance, with the hopeful ingress of 3G technology in the country via private players this financial year, would smartphone prices drop?
Further, will the gadgets, your everyday electronic peripherals be cheaper, or will their prices go up they gain some Rupees? Should one buy that LCD TV now or hang the decision till post budget? Will there be any change in the price of our favorite tech-bricks at all?
Like you, our industry experts have their own expectations with regards to the budget; Techtree brings excerpts of the same - straight from the bigwigs.
"While I expect this budget to foremost address macro issues that impact demand generation, industry also needs administrative & tax reforms in various areas like for movement of goods & double taxation. In 16 states in India, there are entry formalities for goods movement. Every transaction needs to accompany with entry form, availability of which is always cumbersome.
We levy service tax on total value of contract and then VAT on material value. This needs correction. On custom duties, correction is needed on lens & accessories of Digital SLR which are classified separately & thus attract peak duties of 10% where as Digital SLR is classified under zero basic duties. This results into extremely high grey market for lenses causing enormous revenue losses for Government as well as Companies operating in India. Apart from this some announcement on GST progress roadmap will be highly welcome."
- Alok Bharadwaj, Senior Vice President, Canon India.
"Government departments must focus on procuring real technology without brand biases as we all know the ill-impacts of monopolistic market practices. Monopolies hamper development of customer-centric solutions, and the monopolistic players retain unreasonable margins by dictating market prices, very often through unfair trade practices. In such a scenario we would like the Finance Minister to drive free and fair competitive practices in government technology procurement. The solution in this case is as easy to implement as it is to propose"
"We hope that the government will increase their focus on PC penetration - the hall-mark of any developed economy and help in augmenting the IT industry as new market locations open up. Government needs to provide more incentives for local IT manufacturing (for desktops and laptops) and the Government should also look at faster deployment of technology for speeding up eGovernance reforms within central and state departments, and public sector units. Tax exemption for educational institutions and universities is another primary area that would help drive faster technology adoption, thereby making the students industry-ready when they pass-out of schools and colleges"
- Deepanshu Sharma, General Manager - Marketing Strategy & ISV Alliances, AMD India
The Tax boundaries need to be rationalized and State Sales tax should be communized without any exception of states putting any additional tax.
India has a great potential for the IT, Telecom and Electronics sector. To have a better edge over international market, development of component and raw material is essential. Government should support such industries and take out special schemes for in-house component development and R&D.
To make this industry grow and contribute to the whole economy the following area's need attention during this budget:
- Implementation of GST and rationalize taxation on all India basis.
- Levy of Fringe Benefit Tax (FBT) and "Minimum Alternate Tax (MAT)" resulting in high operational cost making final product costly.
- High interest rates leading to pressure on borrowing increasing Overheads.
- High corporate Tax of 30% resulting in increase of overheads making Product uncompetitive in domestic market.
- Moon B Shin, Managing Director - LG Electronics India
Mobile industry pays around 20-25% direct and indirect taxes the load for which is ultimately passed on to the subscriber but if this tax is reduced, it would form a catalytic factor for the industry which currently is growing at the rate of 40-45%.
If we want to achieve another 10% growth the government should cut the taxes for the industry which will help in increasing the subscriber base and eventually generating more revenues. We would also expect the government to distinguish profitable PSUs to generate additional cash which will reduce the fiscal deficit.
- Debasis Chatterji, CEO, Netxcell Limited
"I expect heavy tax reforms from the interim budget 2009-10 considering the current economic situation. Rationalization and continuation of the existing 8% excise duty/CVD on all IT products and streamlining of Local Services Tax (LST) would be recommended. I also anticipate that the government would take appropriate steps to either abolish Special Additional Duty (SAD) which stands at 4% at present on all IT products or make it at par with Central State Tax (CST) rate which is at 2% considering the CST phase out plan being worked out by the government."
- Suresh Balasubramanian, National Sales Director, India - Cisco Consumer Business Group
"I expect the upcoming budget to provide (for) expenditure on infrastructure development particularly in major metros. Although the Government is investing a lot in building roads, bridges etc., we completely lack in security infrastructure to protect our cities from terror incidence like 26/11. The government needs to invest in security infrastructure like city surveillance, crowd management (such systems exist in cities like London, New York). This helps enabling an efficient, secure flow of people, goods, vehicles, capital and information and making India more attractive for private investors, international and regional organizations, residents, tourists and more.
The government should also pay attention to custom duties on security & safety products. Peak rate of Custom Duty of 24.42% is applicable for most of the imports on hardware and software. Add to this Freight & Forwarding, Insurance & Other charges the total Import cost goes up to 30% on Ex-Works. Reduction in custom duty on Security & Safety hardware & software will help make these products more affordable."
- Manohar Bidaye, Chairman, Zicom Electronic Security Systems Ltd.
Source : Techtree.com