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NEW
DELHI: The consumer durables sector in India is expected to
achieve a growth of 12 per cent in 2007-08, surpassing the
11.5 per cent it posted a year ago.
The
Ficci (Federation of Indian Chambers of Commerce and Industry)
survey on growth projections for the Consumer Durable Goods
Sector for 2007-08 said this rise was despite the constraints
of an inverted customs duty structure and high levels of excise
duties on the main growth drivers of white goods and consumer
electronics industry.
According
to the report, the growth can further accelerate if the government
evolves a uniform tariff and tax structure for all electronic
hardware.
While television sets attract an excise duty of 16 per cent,
personal computers are taxed at 12 per cent. Similarly, TV
sets attract a 12.5 per cent value added tax (VAT) rate, while
it is just 4 per cent for PCs.
Based
on feedback and interaction with representatives of consumer
durables industry, allied industry organizations, associations,
government agencies and public sector undertakings, Ficci
revealed that the consumer durable sector was poised for a
quantum leap due to technological improvements, falling prices
due to competition, aggressive and innovative marketing and
declining import tariffs.
Consumer electronic manufacturers are of the opinion that
in the era of digital convergence, differential taxation policies
for IT and consumer electronics products create distortions
and anomalous situations. There is the need for reducing the
excise duty on hardware to 8 per cent for helping the domestic
industry.
At present, the customs duty on colour television and colour
picture tubes, on import from Thailand is 10 per cent. This
has come down to 6.25 per cent from September 2006 and zero
per cent in year 2007. On the contrary, many inputs for indigenous
production of these items attract the peak rate customs duty
of 10 per cent. This anomalous situation would discourage
entrepreneurs to manufacture and invest in India.
The industry is in favour of granting 40 per cent abatement
on MRP-based excise duty on CTVs and air conditioners from
35 per cent and 30 per cent respectively. There is the need
for reducing excise duties on colour picture tube and some
equipment used by the B&W TV industry. The fast growing
segments which have led the growth of consumer durables industry
and are expected to drive sales are high-end products like
flat panel TVs, LCD TVs, Plasma TVs, Slim CRT TVs, DVD players,
etc.
The sectors which are projected to achieve "excellent"
growth rates of more than 20 per cent in terms of quantity
produced are: high-end flat panel TV (100 per cent), LCD TV
(110 per cent), plasma TV (100 per cent) VCD/MP3 (20 per cent),
DVDs (25 per cent), DVDs -organized (25 per cent).
The
sectors which are expected to record "high" growth
rates between 10 to 20 per cent in April-March 2007-08 over
the corresponding previous period are colour TVs (15 per cent),
flat cathode ray tube -CRT TVs (15 per cent) etc. The sale
of Black and White TVs is expected to fall by 20 per cent.
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