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Source: media reports

Reduction of excise duty will spur demand

Reduction of excise duty will spur demand
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First Published: Tue, Feb 24 2009. 10 24 PM IST
Updated: Tue, Feb 24 2009. 10 24 PM IST
IT pundits feel…
Vinnie Mehta, executive director, MAIT
“We welcome the several proactive measures announced by the government over the last few months to sustain the growth of the domestic economy. 4% 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 8% excise duty while desktops and notebooks will continue to remain at the same rate. Excise duty on desktops and notebooks was brought down to 8% in December 2008”
He added, “We are also glad that the service tax has been brought down to 10%. 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, Mehta said, “Apart from fiscal measures as announced today, It should also be made mandatory for nationalized and PSU banks to earmark funds for easy and subsidized 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.”
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Auto experts say…
Dilip Chenoy, director general, Society of Indian Automobile Manufacturers
The excise cuts are likely to bring down prices for light commercial vehicles and three-wheeler goods carriers. ”This is one additional element in the package for commercial vehicle makers,” said Dilip Chenoy, director general, Society of Indian Automobile Manufacturers.
Earlier the government had announced a special line of credit for non-banking financial institutions lending to commercial vehicle buyers.
Ravi Chopra, managing director, Piaggio Vehicles
Piaggio Vehicle India Pvt. Ltd. plans to reduce the price on its sub-one tonne Ape Truk by Rs4,000 and reduce Rs2,500 on its three wheelers from Wednesday. ”This is a step in the right direction and will definitely help spur demand. Having said that, consumer finance continues to be an area of concern as the banks are still reluctant in lending,” Ravi Chopra, managing director, Piaggio Vehicles.
Vishnu Mathur, executive director, Automotive Component Manufacturers Association of India
The 2% cut in rate would have a limited impact on after market sales as long as the abatement rates stayed the same, said Vishnu Mathur, executive director of the Automotive Component Manufacturers Association of India.
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First Published: Tue, Feb 24 2009. 10 24 PM IST