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PC prices may go up

Netscribes/Abhijit Basu

Personal computer prices in the country could go up by 2-3 per cent if the expected 'Gujarat' surcharge on 'high value products' comes through.

There is much uncertainty in the hardware industry over the proposed surcharge on white goods, which will include PCs too. Expecting an additional surcharge on high-value PC products (costing upwards of Rs 45,000), companies have already started chalking out alternate pricing plans.

"There is a lot of speculation over an additional 2-3 per cent surcharge on PCs and we are still waiting for the official notification. However, if it happens, the rise in costs will be passed on to the customer," Shrikant Joshi, senior vice-president (product & technology division) at Bombay-based Zenith Computers said.

"Post-Budget, there might be a hike in excise duty and an additional component beyond the Special Additional Duty of 4 per cent that we pay today," he added.

An official at a domestic hardware manufacturing company said, "We do not want to hike PC prices as this will affect volumes. And we anyway operate on wafer-thin margins. However, if the Centre slaps an additional surcharge, then we will be forced to do so."

Vinnie Mehta, director of the Manufacturers' Association of Information Technology (MAIT), said he was not aware of any such notification. "Although I am not aware of any such notification, it cannot be totally ruled out. If it happens, it would be bad news for the PC industry. However, there is a lot of pressure on the government to reduce the fiscal deficit after the Gujarat disaster," he said.

Currently, PC vendors are levied a basic duty of 15 per cent, with a surcharge of 10 per cent on the basic duty. A special additional duty (SAD) of 4 per cent is further levied on the products, along with a countervailing duty (CVD) of 16 per cent. Depending on the state, an additional 4-10 per cent local sales tax is levied on the products.

Hardware companies fear that an additional surcharge of 2 per cent on PC products could lead to a rise in prices. "Any rise in duties will be passed on to the consumer. This will negate all efforts to bring PCs to the masses," Mehta said.

"The finance minister has to choose between a national calamity and the future of an entire industry. We fear that the tax sops promised to us might not come true. If that happens, the entire industry will be plunged into darkness as the future of the Indian hardware industry depends on those decisions," he feared.

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