1.
Foreign Direct Investment:
- Approvals for all foreign direct investment
upto 100% in the electronics hardware manufacturing
sector are under the automatic route.
2.
Customs Duty:
- Peak rate of customs duty is 10%. Customs
duty on 217 tariff lines covered under the Information Technology Agreement
(ITA-1) of WTO is 0%.
- All goods required in the manufacture of
ITA-1 items have been exempted from customs duty subject to actual user
condition.
- Customs duty
on specified raw materials / inputs used for manufacture of electronic
components is 0%.
- Customs duty on specified capital goods
used for manufacture of electronic goods is 0%.
- Parts, components and accessories for the
manufacture of mobile handsets, sub-parts for the manufacture of such parts and
components, and parts or components for the manufacture of battery chargers and
hands-free headphones of such mobile handsets have been exempted from customs
duty, to promote indigenous manufacture of mobile handsets.
- Customs duty on LCD Panels has been
reduced from 10% to 5% to promote indigenous manufacture of LCD TV.
3.
Excise Duty:
- The
standard rate of excise duty (CENVAT) is 10%.
- Microprocessors, Hard Disc Drives, Floppy
Disc Drives, CD ROM Drives, DVD Drives/DVD Writers, Flash Memory and
Combo-Drives meant for fitment inside the CPU housing/laptop body are exempted
from excise duty, to promote indigenous manufacture of computers.
- Parts, components and accessories of
mobile handsets and parts, components of battery chargers and hands-free
headphones of such mobile handsets have been exempted from excise duty, to
promote indigenous manufacture of mobile handsets.
4.
Export Promotion Capital Goods scheme (EPCG):
- The general Export Promotion Capital Goods (EPCG) Scheme
allows import of capital goods at 3% customs duty, subject to an export
obligation equivalent to 8 times of duty saved on capital goods imported under
EPCG scheme, to be fulfilled in 8 years reckoned from Authorization issue-date.
However, a Zero duty EPCG Scheme is available to exporters of electronic
products. It allows import of capital goods at zero% customs duty, subject to
an export obligation equivalent to 6 times of duty saved on capital goods
imported under EPCG scheme, to be fulfilled in 6 years reckoned from
Authorization issue-date.
- The export obligation under EPCG Scheme can
also be fulfilled by the supply of Information Technology Agreement (ITA-1)
items to the DTA provided the realization is in free foreign exchange.
5. Supplies of Information Technology Agreement (ITA-1) items and
notified zero duty telecom/electronic items in the Domestic Tariff Area (DTA):
- Supplies of Information Technology
Agreement (ITA-1) items and notified zero duty telecom/electronic items in the
Domestic Tariff Area (DTA) by Electronics Hardware Technology Park
(EHTP)/Export Oriented Unit (EOU) units are counted for the purpose of fulfillment of positive Net Foreign Exchange Earnings
(NFE).
6.
Special Economic Zones (SEZs):
- Special Economic Zones (SEZs)
are being set up to enable hassle free
manufacturing and trading for export purposes.
- Sales from Domestic Tariff Area (DTA) to SEZs are being treated as physical export. This entitles
domestic suppliers to Drawback/ DEPB benefits, CST exemption and Service Tax
exemption.
- 100% Income Tax exemption on export profits
available to SEZ units for 5 years, 50% for next 5 years and 50% of ploughed
back profits for 5 years thereafter.
7. Information
Technology Investment Regions (ITIRs)
- The Policy Resolution for Setting up of ITIRs has been published in the Gazette of India dated
29.5.2008. The regions would be a combination of IT/ITES and Electronics
Hardware Manufacturing Units; public utilities, residential areas, social
infrastructure and administrative services. Such regions could include new
integrated townships, SEZs, industrial parks etc.
8. Special Incentive Package Scheme (SIPS):
- A Special Incentive Package Scheme (SIPS) to
encourage investments for setting up Semiconductor Fabrication and other micro
and nano technology manufacture industries in
9. Task
Force to suggest measures to stimulate the growth of IT, ITES and Electronics
Hardware Manufacturing Industry
In view of the enormous opportunities ahead
and need to sustain the growth of the IT, ITES and Electronics Hardware
Manufacturing sector in the wake of prevailing global economic downturn, DIT
had set up an Industry led Task Force to suggest measures to stimulate the
growth of IT, ITES and Electronics Hardware Manufacturing Industry in the
country, in August 2009, to recommend:
i. Strategies to augment the growth of the IT software and IT
enabled services sector in the context of global developments.
ii. Steps needed to accelerate domestic demand
for (i) Electronics hardware products and (ii) IT
& IT enabled Services.
iii. Steps needed to boost domestic manufacturing
in Electronics hardware sector.
The
recommendations of the Task Force have been taken up for appropriate
implementation.
10. Promotion of
Research & Development:
Weighted deduction of 200% of expenditure incurred on
in-house R&D in case of a company engaged in the business of electronic
equipment, computers and telecommunication equipment is available under clause
(1) of sub-section (2AB) of Section 35 of the Income Tax Act.
Department of Information Technology has put in place the following
Schemes:
- Support International Patent Protection in
Electronics & IT (SIP-EIT): Under this scheme SMEs and Technology
Start-up units will be reimbursed costs incurred in filing international patent
applications in Electronics & ICT domain for their indigenous inventions to
the extent of 50% of the actual cost incurred by the applicant on filing
International Patent, subject to a maximum of Rs.15 lakhs
per application.
- Multiplier Grants Scheme: The objective of the scheme is to
encourage industry to collaborate with premier Academic and Government R&D
institutions for development of innovative and commercially viable products /
packages. Under this scheme, the Government would provide grants up to the
maximum of twice the amount invested by the industry / industry consortium / association
towards the innovation at academic / R&D institution.
- Scheme for Technology Incubation and
Development of Entrepreneurs (TIDE) in the area of Electronics, ICT and
Management: The Scheme aims
to assist Institutions of Higher learning (IITs, IIMs, IIITs and NITs) to strengthen their Technology Incubation Centres and
thus enable young entrepreneurs to initiate technology start up companies for
commercial exploitation of technologies developed by them.