SPOTLIGHT ON INDIAN ELECTRONICS Spotlight on Indian Electronics | Page 75

NET ZERO IMPORTS
Sl .
Description
Amount ( Rs . Cr )
Conversion factors
Assumptions
6
Input tax base ( of which )
4,123.38
63.28 %
Input base estimated at 63.28 %
of sales of domestically
manufactured units
- Goods ( current inputs - non-DTP / NB )
511.30
12.40 %
I / O matrix 2007-08
- Goods ( current inputs - DTP / NB )
2,618.35
63.50 %
I / O matrix 2007-08
- Goods ( capital inputs - machinery )
325.75
7.90 %
- Services
470.07
11.40 %
I / O matrix 2007-08
7
8
Estimated output tax
651.61
12.50 %
CENVAT rate assumed @ 12.5 %
for both inputs and output
Estimated input tax ( of which ) 497.73 - Excise duty ( current inputs - non DTP / NB ) 63.91 12.50 % - Excise duty ( current inputs - DTP / NB ) 327.29 12.50 % - Excise duty ( capital inputs ) 40.72 12.50 % - Service tax 65.81 14.00 %
9
Net output tax on manufacturer
153.88
Difference between output and
input taxes
10
11
12
Tax revenues collected by the government ( Net output tax + Input tax - input tax credit to B2B purchaser )
Estimated output tax at concessional rate for manufacturer
Tax revenues collected by the government under concessional rate ( Output tax at concessional rate + input taxes excl . input tax on DTP / NB inputs - output tax @ 2 % on B2B sales )
325.80
104.26
2 %
Concessional rate of 2 % without
CENVAT credit
222.57
Revenue impact for government ( 12-10 )
-103.24
Data source : Market size estimated by ITOPS 2015 study , MAIT / IMRB
Scenario 2- Excise Duty of 2 % on domestically manufactured
PCs / Notebooks / Laptops under this scenario , collected from
finished goods with CENVAT credit of the 2 % tax to eligible
manufacturers and suppliers of parts and components etc .
B2B buyers assuming 100 % substitution of imports by
after giving input tax credit for B2B purchases , would be INR
domestic production .
1018.14 Cr . The estimated revenue expected at a concessional
Under this scenario we assume that 100 % of the market share
rate of Excise duty of 2 % ( without availing CENVAT credits on
is manufactured domestically . As a result the input tax base
inputs and capital goods ) on finished products is estimated at
and blocked input taxes also increase . The table below shows
INR 695.53 Cr . Thus the negative revenue impact for
that the estimated present revenue of the government on
government would be INR 322.61 Cr under this scenario .
Sl .
Description
Amount ( Rs . Cr )
Conversion factors
Assumptions
1
Market size ( Desktops + Laptops ) FY15 ( of which )
20,362.80
61.1
USD 3332.7 mln @ Rs .
61.1 / USD ; ITOPS study
2 Sales of domestically manufactured units ( B2B + B2C sales )
20,362.80
100 %
Domestic manufacturing
estimated at 100 % of total sales
3 Output tax base for B2B + B2C sales 16,290.24 80 % Abatement of 20 % on IT products
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