Tech Budget 08

[arjunsood2003]

heres my compilation of wat the budget got for the tech-savvy ppl.. source:tech2.com hope it comes out well.

 

 

Wat the budget says:

136. To establish parity between devices used in the information/communication sector and the entertainment sector, I propose to reduce the duty on convergence products from 10 per cent to 5 per cent.

 

EXPLANATORY NOTES (CENTRAL EXCISE)

84.4 Concessional rate of 8% excise duty/CVD was earlier provided on MP3 player or MPEG 4 player. Now all MP3/MP4 or MPEG 4 players with or without radio/video reception facility will attract 8% excise duty/CVD.

 

EXPLANATORY NOTES (CUSTOMS)

84.3 Concessional rate of 5% customs duty was earlier provided on MP3 player or MPEG 4 players. Now all MP3/ MP4 or MPEG 4 players, with or without radio/video reception facility will attract 5% customs duty.

 

What it means:

Pure recorded audio devices (either MP3 or MP4) attracted 'concessional' customs duty of 5% and 'concessional' excise duty of 8%. The moment the PMP (Portable media player) added FM Radio capability or video viewing ability, the 'concessional' rate was not applicable and instead customs and excise of 10% and 16% respectively was charged. This of course makes no sense from a tech point of view. However, it does explain why the iPod Shuffle is so much closer to the dollar price in India than the iPod Nano or iPod video.

 

Anyway, Budget 2008 has removed this bizarre anomaly. All PMPs will now be taxed at the concessional rate. Varun Khandelwal of Lipap Systems, the official India distributors of Cowon told Tech2.com that prices of PMPs with video and/or FM would definitely come down and will be passed on to consumers.

 

We're still waiting to hear official statements from Apple, Creative etc. but rest assured, the news should be good!

 

 

What the budget says:

151. Similarly, I propose to increase the excise duty on packaged software from 8 per cent to 12 per cent to bring it on par with customised software which will attract a service tax of 12 per cent.

 

What it means:

Now all games bought off the shelf qualify as "packaged software". However, excise duty is levied only on locally manufactured products (as against customs duty which is levied on imported stuff). Thus locally made titles including most PlayStation 2 games, will be 4% more expensive. Milestone Interactive (which prints and distributes PS2 games in India) chief, Jayant Sharma told Tech2.com that he would like to look at the fine print but admitted that the hike would be passed on to consumers since Excise is typically slapped on the final selling price.

 

What the budget says:

84.2. Specified parts of set-top boxes, namely SMPS power board and IR module, for use in manufacture of set-top box, have been exempted from customs duty.

 

What this means:

This move has been made with the intention of encouraging local manufacturing and in turn bringing down prices due to increased competition. Keeping this in mind we asked a couple of local manufacturers if this new change would have any impact on the costs. The answer we got was a simple … No! They felt that the cost of manufacturing in India had already dipped by a great extent and this change would have, at best, a marginal impact.

 

It remains to be seen, how this situation will play out. 2008 is going to be the year of the STB, as apart from DTH/CAS, we will also see countrywide roll-outs of IPTV from companies like BSNL/MTNL, Bharti and Reliance. This will increase demand greatly and in fact the Govt. may be forced to revisit this issue by giving even greater concessions.

 

What the budget says:

146. There are a number of products which are goods of mass consumption. There is also the need to have tax parity on similar goods. Taking into account requests from a number of industries, I propose to reduce the excise duty from 16 per cent to nil on a few items including composting machines, wireless data cards, packaged coconut water, tea and coffee mixes, and puffed rice.

 

What it means:

Most telecom operators who offer such products tend to import them from the likes of Huawei, Sierra Wireless etc. and this should encourage them to manufacture in India itself. The catch though is that we hope the term "Wireless Data Cards" includes the new USB dongles as well since data "cards" as such have become defunct as laptop makers have phased out the PCIMCIA slot into which these cards were inserted.

 

Assuming that the entire duty cut benefit is passed on to consumers, a USB data dongle which typically costs around Rs. 3,000 will be cheaper by nearly Rs. 500. Spokespersons for both Airtel and Tata Indicom have confirmed that they will pass on the ENTIRE benefit to consumers.

 

What the budget says:

135. I propose to fully exempt from duty specified parts of set top boxes and specified raw materials for use in the IT/electronic hardware industry.

 

What it means:

There's a lot of tech manufacturing jargon in there but it looks like a lot of raw material for CRTs and Plasma panels seems to have been exempted entirely. Considering that most of the global majors such as LG and Samsung make CRTs in India not to mention Indian MNCs like Videocon, we think that some of this may pass on to consumers.

 

Overall-- what might be cheaper:

1. mp3,mp4 players, ipods

2. usb data dongles

3. CRTs, and Plasmas

edit: 4. consoles

 

What might be more expensive:

1. Games (ps2 games)

 

what might remain same:

1. Set top boxes

 

-------------------------------------------------------------

all the info here is from tech2.com and their conclusions of the budget. mods please correct/change/add data in case of any error on my part.

[Don Karnage]

Hmm.. nice list but moneycontrol is listing 'Gaming consoles' as getting cheaper too (even though I can't figure why) - http://www.moneycontrol.com/budget2008/win...no=3&next=0

They're also showing 'Mobile Phones' as getting more expensive.

[arun360]

mp3,mp4 players, ipods

 

author says it like they're all different things

[arjunsood2003]

^^

i meant all PMPs, not just ipods..thus wrote it tht way...