Proposed 28% GST Rate to Affect IT Hardware Market

Posted on: Jun-2017 | By: QY Research | Information

IT hardware companies have requested the government that standardized Goods and Services Tax rate of 18% should be applicable on IT products, such as printers and monitors, as an alternative to 28% projected for some products, which will make them costly.
 
The IT hardware market body, Manufacturers Association for Information Technology, has also wished for clarity from the Government of India on 2 rates of planned for printers below the Goods and Services Tax, and insisted that IT goods should be wrapped below lower category of 18%, which is near to the present tax stages imposed on them.

"It is suggested that the directory of IT products as given in the Information Technology Agreement, to which India is a part of, be subjected to Goods and Services Tax at the rate of 18%. This will also make sure that the target of the Government of digital India is gained as Goods and Services Tax at the rate of 28% will turn IT goods costly to the end user," Manufacturers Association for Information Technology claimed to the media. 

Currently, over 18.5% duty is taxed on projectors and monitors. These goods are also an essential element of personal computers on which 18% Goods and Services Tax rate will be taxed.

On the other hand, the government under Goods and Services Tax rule, which is to be effective from July 1, 2017, has projected tax of 28% on projectors and monitors.

In addition, rate of Goods and Services Tax on other IT goods such as data cable and LAN has projected at 28%, while up to 17.5% tax is imposed on them currently. This comprises of 5% VAT and 12.5% countervailing duty.

"The Finance Ministry without delay needs to elucidate glitches in tax slabs for  projector and printers. All of these goods along with IT products such as LAN and data cable together form essential part of “Digital India” and they should be levied at 18% to make a successful Digital India," Nitin Kunkolienker, Manufacturers Association for Information Technology President said.

For now, the government is firm on its decision on the Goods and Services Tax that will be effective from July 01, 2017.