MAIT welcomes budget 2011

style="font-size: 13pt;" size="3">The
Honorable Union Finance Minister has presented an inclusive budget
for the 'aam aadmi' and made simple corrections for building the
industrial impetus for the nation. By defining a clear roadmap for
the DTC and GST, the FM has set the stage for delivering a power
fiscal ecosystem where the cascaded taxes are progressively ended,
business is made simple for business and the industry is made
competitive. It is heartening that the Hon'ble Finance Minister has
recognized the strong potential of IT to reboot key national
projects.

style="font-size: 13pt;" size="3">The
UIDAI implementation; National Knowledge Network and projects like
Central Electronic Registry will improve the system efficiency as
well as boost demand for IT in the country. Broadband connectivity to
2.5 lakh panchayats in three years will have a major e-inclusion
impact on the rural India.

style="font-size: 13pt;" size="3">The
increase of Minimum Alternate tax (18.5 percent from 18 percent) and
the reduction of the surcharge for domestic companies(5 percent from
7.5 percent) are a typical FM trick (give with one hand and take
with another), no surprise there; and that is the best thing about
the budget.

style="font-size: 13pt;" size="3">Some
of the other noteworthy outcomes of the Union Budget 2011-12 are:

style="font-size: 13pt;" size="3">* No change in peak customs duty rate

style="font-size: 13pt;" size="3">* Cut in import duties of raw
material and full exemption from SAD
for mobile phones to boost cellphone industry

style="font-size: 13pt;" size="3">* Central excise duty rate unchanged
at 10 percent

style="font-size: 13pt;" size="3">* Rate of service tax continues at
10 percent

style="font-size: 13pt;" size="3">* Clarification on the IT Software
for non-rsp'able software
imports

style="font-size: 13pt;" size="3">* New scheme to be introduced for
refund of service tax on lines of
drawback of duties.

style="font-size: 13pt;" size="3">* Concessional import duty structure
of five percent CVD and nil
SAD on prescribed parts for manufacture of DVD writers , combo drives
and CD drives subject to actual user option will drive the
manufacturing options but an increase in excise duty to five percent
for microprocessors, DVD writers, CD writers, Floppy Disk Drives,
Flash drives will increase the PC rates for the consumer.

style="font-size: 13pt;" size="3">On
the flip side — it is extremely disappointing that the bulk of the
electronics manufacturing sector will continue to see an exposure to
SAD - a controversial four percent duty that promotes imports at the
cost of manufacture. By missing on a long-standing demand of the
industry — another year is lost for a breakthrough in India
manufacturing.