MAIT Welcomes Package for Economic Stimulus

by CXOtoday Staff    Feb 25, 2009

MAIT has welcomed the announcement of the third package for economic stimulus by the union government to give a boost to domestic consumption and provide relief to the industry through 2% reduction of excise duty and 2.5% reduction in service tax.

Vinnie Mehta, executive director of MAIT said, "We welcome the several proactive measures announced by the government over the last few months to sustain the growth of the domestic economy. 2% 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 eight percent 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"

Mehta also said that bringing the service taz down to 10% would 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."