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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