Implementation of zero duty regime under IT Agreement postponed to 2005

The government on Thursday announced major incentives including cut in customs duty for inputs for IT, electronics and telecom sector, while postponing the implementation of zero duty regime under the IT Agreement to 2005 from 2003.

The customs duty on specified inputs for IT, electronics and telecom sector have been reduced to five per cent from 25 per cent and 35 per cent and customs duty on specified capital goods has also been slashed to 15 per cent from 25 per cent.

The duty on certain IT items would also be brought down to 10 per cent or five per cent as per the WTO binding, Finance Minister Yashwant Sinha said while presenting the Union Budget 2002-03 in Lok Sabha.

"The House may recall that in 1998, I had announced that the zero duty regime on IT products would be preponed and implemented by 2003. However, the local manufacturers have urged me strongly that it may be made effective from the year 2005. This would give them an opportunity to gear up to meet challenges of international competition. I have decided to accept their demand,"

The move would give the local manufacturers an opportunity to gear up to meet challenges of international competition, Sinha said.

PTI

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