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Fiscal Policy

The salient features of the Fiscal Policy as applicable to the Electronics Hardware Sector are as follows:

  • Peak rate of customs duty is 10%. The customs duty on 217 Information Technology Agreement (ITA-1) items is zero%. The Agreement covers the following main categories of products and components: Computers and peripherals; Telecommunication equipment; Electronic components including semiconductors; Semiconductor manufacturing equipment; Software and Scientific instruments.
  • All goods required in the manufacture of ITA-1 items have been exempted from customs duty subject to Actual user condition.
  • Customs duty on specified raw materials / inputs used for manufacture of electronic components and optical fibres and cables is 0%.
  • Customs duty on specified capital goods used for manufacture of electronic goods is 0%.
  • Customs duty on LCD Panels and Set Top Box is 5%.
  • Parts, components and accessories of mobile handsets including cellular phones are exempted from basic customs duty and excise duty/CVD.
  • Full exemption from 4% special CVD on parts for manufacture of mobile phones and accessories has been reintroduced for one year i.e. upto 6.7.2010.
  • The mean rate of excise duty (CENVAT) is 8%.
  • Microprocessors, Hard Disc Drives, Floppy Disc Drives, CD ROM Drives, DVD Drives/DVD Writers, Flash Memory and Combo-Drives are exempted from excise duty.
  • VAT on IT items is @4% and non-IT electronic items is @12.5%. CST is 2%.

 

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