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Cetma plea to cut sales tax on CTVs

27-January-2004
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Cetma plea to cut sales tax on CTVs

In a bid to eradicate bottlenecks such as low penetration levels and poor purchasing power of consumer electronics, the Consumer Electronics and TV Manufacturers Association (Cetma) is planning to take concrete steps and plead with the government to reduce sales tax on colour televisions (CTVs) from 17 per cent to 12 per cent in the western region.

This is because Cetma is understood to have observed that the northern region has witnessed double-digit growth in the CTV segment in the past one year due to sales tax on CTVs being 12 per cent. However, this is not the case in the western region, which witnessed a dismal growth.

Further, Cetma has also stressed the need to reduce sales tax on washing machines and microwave ovens from 23 per cent to about 12 per cent, nationally. In fact, there is no reason and need to impose a sales tax on the two specific products, Cetma secretary-general Suresh Khanna told FE.

According to Philips India Ltd vice-president consumer electronics D Shivkumar, who has recently been appointed vice-president (western region) Cetma: “If the sales tax on CTVs is reduced from 17 per cent to 12 per cent in the western region, prices of CTVs will come down by five per cent and consumers can avail of CTVs at reduced prices. Companies will also benefit as the move will enable them to spur CTV volumes. Besides, they will be able to invest much more on R&D at their manufacturing plants. Hence, such a move should be welcomed and the government should consider this matter seriously.”

On the customs duty structure, explained Mr Khanna: “The government should look into creating a three-tier duty structure whereby customs duty should be lower on raw materials needed for manufacturing CE products, higher on the intermediary products and highest on the fini-shed products. But in India, this is not the case. The Indian CE market is very competitive and this is the main issue which needs to be addressed.”

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