CETMA unhappy, but Chandra sees lots to cheer about

NEW DELHI: The issue of set top boxes (STBs), like Banquo's ghost, keeps surfacing at various fora, raking up more debating points. Today's Indian Budget is an example.

While CETMA, the apex body of electronics goods manufacturers in India, today said it was "disappointed" with finance minister Jaswant Singh not having touched its demand on reduction of import duty on STBs, Zee Group chairman Subhash Chandra gave a thumbs up signal to the Budget and said reduction in duties would help companies import the latest technology, including STBs.

"For the broadcasting industry, the import of capital equipment and set top boxes has been made easy. Customs duty has come down and this will help companies in importing latest technology from other countries and, thus, ultimately benefit the consumers," Chandra observed.

But CETMA thinks otherwise. "We are very disappointed that the Budget does not touch upon the suggestion by us on reducing the customs duty on STBs at 10 per cent," CETMA's Suresh Khanna told indiantelevision this evening, sounding dejected.

When asked whether he was sure there was no proposal in the Budget that would indirectly or directly facilitate cheaper STBs for the consumer, Khanna said: "I don't think so."

So much so that CETMA is planning to petition the information and broadcasting ministry as also the finance ministry "at the first available opportunity" to push for review of the government (in)decision on STB, especially at a time when the government is pushing aggressively the implementation of conditional access system.

"We will petition the government and hope that it would see our point of view on making available to consumers cheap STBs," Khanna said.

But Chandra feels that the duty reduction proposed by the finance minister for infotech peripherals would encompass components for STBs too that would help companies making available STBs to Indians at a cheap rate, as has been advocated by the government from time to time.

Though Chandra felt it was a "populist Budget", he still gave a thumbs up signal to finance minister Jaswant Singh's first effort.

"Given the current circumstances, which the global economy is going through, the Budget has done reasonably well. I will rate it as 6 on 10," Chandra said.

Pointing out that lots more was expected from the Budget and lots more could have been done, Chandra said, "This is definitely a populist budget. Politically too, the Budget was perfect with the five priorities being stressed by the finance minister."

Chandra also differed from quite a few in the industry and saw advantages in areas where others in the industry had had expressed disappointment. "With the surcharge being halved from 5 per cent to 2.5 per cent it will result in direct saving to the company. There is no other change in the tax structure," Chandra said, adding, "However, the removal of excise duty on recorded audio-cassettes (and CDs) is definitely a positive move that will help in fighting piracy and also increase sales for Zee Records."

According to Chandra, "Though service tax has been increased to 8 per cent from 5 per cent, since it is going to be covered under VAT (value added tax), it would result in substantial savings to companies like us."

The Budget definitely provides greater clarity with the tax losses being now available even in case where there is change in ownership, he said.

There has been a positive move made to enhance the primary markets with the dividend tax being abolished. Companies would now have to pay 4.5 per cent dividend tax on declared amount. With the Long Term Capital Gain now being abolished on sale of listed shares bought after 1 March 2003 it will help build market capitalisation, Chandra observed.

In the case of taxation of individuals, Chandra said proposals like standard deduction of Rs 20,000 and Rs 30,000, removal of surcharge in case of income less than 850,000 a year, increase of surcharge to 10 per cent from 5 per cent in other cases, introduction of rebate against education expenses Rs 12,000 per child per year and enhancement of medical reimbursement to Rs 30,000 from Rs 15,000 will lead to increase in available cash with individuals.

Introduction of value added tax (VAT), gradually will replace sales tax, he felt.

The reforms in taxation towards capital markets will turn into positive inflows in the market, he said.

Finally, Chandra said, the proposal to allow private sector participation in the development of health of sports and infrastructure is definitely a "positive move" and will help in the overall development of human resources.

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