GST rates: 18% tax on personal computers, 28% on monitors will hit local manufacturers, says MAIT

New Delhi: The IT hardware industry hailed the government's move to scale down goods and services tax rate for printers to 18 percent but expect business to be impacted because of high 28 percent rate imposed on computer monitors and projectors.

The Manufacturers Association for IT (MAIT) has said that existing inventory of computer monitors, projectors and data cable running into a few thousand crores will suffer due to increase in tax rate on them from around 14 percent charged from end consumers at present, to 28 percent under the new tax regime.

"We thank government for considering request on computer printers by keeping the GST rate at 18 percent. However, the proposed rate of 28 percent on monitors, projector and data cable will adversely impact value chain. It is going to hit dealers and manufacturers alike. We expect slowdown in business once GST regime starts," MAIT President Nitin Kunkolienker.

Representative image. Getty Images

Representative image. Getty Images

He said that all dealers get credit based on existing maximum retail price inclusive of taxes.

"As per Legal Metrology Act, a dealer cannot increase price beyond MRP. He can only reduce it. Customers have to effectively pay around 14 percent tax. When government has fixed GST rate of 28 percent on monitors etc, then who will pay rest of the 14 percent? The GST rate at 28 percent becomes draconian at 28 percent. Government should consider this situation on urgent basis," Kunkolienker said.

Under the GST regime, 18 percent tax will be levied on personal computers and 28 percent on monitors which will hit local manufacturers.

"It will be difficult to sell standalone monitors as they will be expensive than the ones purchased with a set of personal computers. This will adversely impact manufacturers of monitors. The price of monitors, printers, data cable will go up in the same proportion as hike in taxes," Kunkolienker said.

Updated Date: Jun 12, 2017 09:22 AM

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