New Delhi, July 3, 2017: Implementation of goods and services tax (GST) will bring innumerable benefits for domestic manufacturers of electronic components as cost of manufacturing will be significantly brought down, noted a recent ASSOCHAM-NEC joint study.
“The local
manufacturers will be able to pass on the tax benefit to consumers in the
form of price reduction,” said the report titled, ‘Electricals
& Electronics Manufacturing in India,’ jointly conducted by
ASSOCHAM and NEC Technologies.
The study also
observed that with the implementation of GST, multiple taxes and cascading
effects of taxes will be eliminated.
Along with these
benefits, firms will also be saving expenses incurred in warehousing and
logistics which stood at approximately 5-8 per cent.
“The lower
taxes, simplified tax structure and technology empowered tax compliance
system will provide an ideal ecosystem to improve the current situation of
electronics manufacturing in India,” said the study.
It also added that,
GST will give a major boost to the Indian electronics industry thereby,
leading to subsequent increase in demand of locally manufactured
electronics.
“With the
implementation of GST, the electronics manufacturers will reap in
significant cost savings in warehousing and logistics,” said the
ASSOCHAM-NEC study.
Further, the report
noted that even the demonetisation move of the government gave a boost to
electronic payment devices with value of transactions getting almost
doubled.
Besides, it is also
certain to bring about innovations in electronic payment industry thereby
leading to increase in number of point of sale (PoS) and mPoS (mobile point
of sale) devices.
“Post
demonetization, government has been promoting digital payments by
introducing e-payments platforms such as BHIM, Bharat QR. All of these
platforms will generate more demand for mobile phone,” the report
said.
The ASSOCHAM-NEC
study recommended that for India to become a robust manufacturing hub, it
should focus on building capabilities across the value chain by reducing
component imports and increasing local value addition.
