Dell on Wednesday announced a six per cent cut in list prices of its desktop systems, notebooks and workstations with immediate effect following the removal of excise duties on computers in the Union Budget.
Zenith Computers will also lower the prices of its personal computers by two per cent.
Welcoming the elimination of excise duties on PCs, Dell said in a statement it would pass on significant savings to Indian customers because of its build-to-order direct model.
As Dell only builds a system once it is ordered and sells directly to customers with no middleman, there is no inventory or backlog to sell through before offering the savings delivered by the new tax codes, it said.
Welcoming the government's move, Dinesh Pai, general manager, Dell India, said, "This again proves that the Dell direct model is about efficiencies that allow us to react to market situations fast and bring added value to our customers."
A Dell OptiPlex 170L with a 2.80-GHz Intel Pentium 4 processor, 128MB of memory and a 40 GB hard drive that had a list price of Rs 45,820 before the duties changed can now be purchased directly from Dell for Rs 43,071.
Similarly, the Dell Latitude D505, a thin and light notebook, will now be available at Rs 71,182 onwards as against the earlier starting price of Rs 75,725. Sales tax, local taxes and any other applicable levies are additional.
The reductions, the statement said, are available only to customers who are billed in Indian Rupees and for orders placed from today onwards.
Meanwhile, Raj Saraf, CMD, Zenith Computers, said: "It (Zenith PCs) will be two per cent cheaper than the earlier price (pre-Budget price)Â…not 8 to 10 per cent as the government was thinking."
"This two per cent comes because of the difference on pre-Budget calculations and now. Two per cent was also coming on our margin when we were putting an excise duty on the PCs. Since there is no excise duty, we do not have to pay that two per cent, so we will pass on that benefit," he said.
He said sales have been affected in case of Zenith as well as of the whole industry post-Budget because of the 'anomaly' in the Budget where finished PCs attract zero excise duty while for components, excise duty is still at 16 per cent, creating an unlevel playing field for domestic manufacturers.
In case of imported PCs, they become cheaper today by about 8 to 10 per cent. There was a 10 per cent customs duty and eight per cent excise duty which is gone now, Saraf said, adding that earlier people were not importing as local PCs were cheaper. Now the case is reversed.
Even if no hard data is there on the decline of sales, no one is buying fresh because the customers are expecting that they should get 8 to 10 per cent reduction because of the Budget announcement, he said.
