SPOTLIGHT ON INDIAN ELECTRONICS Spotlight on Indian Electronics

ESDM & FDI QUERIES involvement of the constituents units in the EMC. Q. 34 How to get land for Greenfield EMC?

The land for EMC or the project may be acquired by the applicant through one of the following modes:

n Outright purchase or long lease from private parties

n Sale( outright or conditional), or long lease of land by central or state or local government or its agency

n Centre or state or local government or its agency participating as equity partner in the SPV wherein the cost of land is provided as its share.

Q. 35 Does national manufacturing policy applies to EMC?

Yes, national manufacturing policy shall be applicable to Greenfield EMC which would fall within the NIMZs. A collection of EMCs, geographically outside the proposed NIMZs may be treated as a single virtual NIMZ for governance purposes.

Q. 36 What are the dates for applicability of EMC scheme?

The scheme will be open for applications for 5 years from the date of notification( November 07, 2012) further period of 5 years shall be available for disbursement of funds to approved applicants. The applications received under the scheme will be appraised on an ongoing basis.

Note:

The details of electronic manufacturing cluster scheme can be seen from the following link-

( http:// deity. gov. in / sites / upload _ files / dit / files / Scan _ EMC- Notification-Gazette. pdf)

The detailed guidelines for electronic manufacturing clusters can be seen from the following link-

( http:// deity. gov. in / sites / upload _ files / dit / files / EMC- Guidlines _ Final. pdf)

The benefits of SEZ are not applicable to unit operating in EMC unless and until EMC is classified as SEZ.

Section VI

Taxation Aspects

Q. 37 What are various forms of taxation in India? etc.

Indirect taxes:	n	Most of the taxes are cenvatable that is it can be squared
Indirect taxes are of the following types:		off against paid taxes.
1) Customs duty: Payable on imports into India	n	Government of India is actively considering Goods &
2) Excise duty: Payable on manufacturing in India 3) Service Tax: Payable on rendering of services 4) Central sales tax / value added tax: Tax on value addition at each level of the distribution network. Tax levied interstate is known as Central Sales Tax.	n	Services Tax which will subsume several of above indirect taxes. India is signatory to ITA-1 which provides for ZERO duty rates on import of specified items. The ITA-1 agreement can be seen from the following link- http:// deity. gov. in / sites / upload _ files / dit / files / Information
5) R & D cess: It is a cess on all payments made by an industrial		% 20Technology % 20Agreement % 20( 1996)% 20( 54 % 20KB).
concern for imported technology.		pdf)
6) Other indirect taxes include: Stamp duty, octroi, property tax

Electronics & IT Industry: Indirect Taxes S. No. Type of Tax Company BO / LO / PO

1. Excise Duties-Levied on manufacture of goods in India. However, may be recovered by vendors for procurements.

Peak Rate is 12.36 % Peak Rate is 12.36 %

2. Service Tax Peak Rate is 12.36 % Peak Rate is 12.36 %

3. Import Duties / Customs Duty( India is signatory to ITA-1 which provides for ZERO basic custom duty rate on import of specified items)

The peak rate of basic custom duty is 10 %( this rate can vary depending upon the item specification).

The above rate is basic rate of duty which is further increased by countervailing duty( 12 %), additional CVD( 4 %), and education cess @ 3 % of taxes) etc.

General peak effective rate – 28.8 %

Imports of specified capital goods is allowed at zero basic custom duty rate

Import of certain input items used in manufacturing of electronic items under ITA-1 are allowed at ZERO basic custom duty rate