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The Tamilnadu Government
should distinguish electronic components from electric components and
restore tax on electronic components and accessories to four per cent,
tax finished goods at four per cent, do away with the proposed resale
tax of one per cent and issure clarification on tax on imported goods,
according to the All India Radio & Electronics Association.
In a release, the
association said that in a Gazette notification following the Budget for
2002-03, the raw material for electronics industry had been classified
under two categories - four per cent and 10 per cent. On an
average the usage of electronics component in the four per cent and 10
per cent category in a finished electronics equipment or instrument was
1:20, and all the components in the two categories were considered raw
materials.
Under the present tax
proposal, the dealer cannot procure components falling under the 10 per
cent category from the distributor ( who is not the first seller ) for
sale to industry. The industry cannot get an offset of 10 per cent
tax paid by the dealer. It has to either pay the higher price or
procure from other States. The one per cent resale tax would hit
small dealers and subject them to harassment and increased paper work,
the release said.
While the 20 per cent
tax on imported goods was intended to help the local industry, it raised
questions on whether the sales tax would cover imported goods only in
Tamilnadu ports of other ports and the rate of local sales tax, if the
item were imported in other State and procured under Form C for resale.
- THE HINDU Business Line, Wednesday April 10, 2002
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Press Releases