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