As per the Information Technology Agreement of the WTO, which India is a signatory of, the country is committed to reducing tariffs on 122 items by 2005.
Key Inputs
Microprocessors, Storage Devices, Ink Cartridges, Floppy Diskettes etc.
Products
Computers and Peripherals, Software applications.
Duty Structure
|
Excise |
Customs
(Basic) |
|
Products |
2000-01 |
2001-02 |
2000-01 |
2001-02 |
|
Computer and peripherals |
16% |
16% |
15% |
15% |
|
Inputs |
|
|
|
|
|
Microprocessors for
computers |
16% |
16% |
0 |
0 |
|
HDD/FDD/CD-ROM drive & Other storage
devices |
16% |
16% |
0 |
0 |
|
Floppy Diskettes |
16% |
16% |
15% |
15% |
|
Routers & Modems |
16% |
16% |
15% |
15% |
Major announcements made in previous year's budget
- Basic customs duty on word processing machines and printed circuit assemblies of word processing machines was reduced from 20% to 15%
- Basic customs duty on static converters used in automatic data processing machines was reduced from 20% to 15%
Industry's demands from Union Budget 2002-03
- Manufacturers Association of Information Technology (MAIT) has demanded that reduction of customs duty on IT hardware items should be as per the original schedule of the IT Agreement of WTO and should not be advanced from 2005 to 2003, as has been indicated by the Finance Ministry.
- Excise duty should be reduced from 16% to 8% on all products in order to combat the grey market.
- Customs duty on all capital goods and all raw materials that go into making IT/electronics and telecom products should be eliminated
- NASSCOM has recommended simplification of procedures related to software exports and clarification related to computation of income tax on income from on-site software development.
- NASSCOM wants business process outsourcing (BPO) to be classified as an IT-enabled service to qualify for tax exemptions under Section 10(a) and 10(b) of the Income Tax Act.
- Internet Service Providers (ISPs) have demanded three-year exemption from the 5% service tax imposed in the last budget.
Key Players
Infosys Technologies, Wipro, NIIT, Tata Infotech, Satyam Computers, Aptech, HCL Infosystems, Mastek Software, Pentafour Software, PSI Data Systems, HCL Technologies etc.
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Run-Up To The Budget
Money
