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The government has reduced Customs duty on a wide range of information technology and telecom products. Duties on plastics and resins have also been cut.
As a result of the duty reduction, prices across a wide range of information technology and telecom products are set to fall.
As per the notification issued by the Central Board of Excise and Customs on Friday, duty rates have also been slashed to 10 per cent on a range of steel items used in automobile parts.
In the IT and telecom sectors, there has been a duty cut on about 25 items.
These include refined copper cathodes, glass parts for such tubes, LCDs, electron guns, microphones and microphone cartridges, magnetic heads of all types and capacitors.
In addition, ceramic and magnetic cartridges, special purpose optical fibres, switches with contact rating of less than 5 amperes, EHT cables have also had their duties slashed to 10 per cent.
The CBEC has also cut Customs duty on steel and aluminium items used in automobile components.
These include alloy steel round bars, seamless steel tubes used in piston pins, free cutting steel used in fuel injections and valve steel used in engine valves.
Commenting on the cuts, Nitin Johari, CFO of Bhushan Steel said most of these components were sourced from abroad and so there would not be much of an impact on domestic steel producers.
Along with aluminium, Customs duty has been cut to 15 per cent on copper tubes also.
Similarly, aluminium foils and sheets have also seen a lowering of their duty component to 10 per cent. The move is aimed at removing the anomalies that have in crept in following duty reductions earlier this month. The duty cuts resulted in intermediaries costing more than finished products.
The move also aims at creating a level playing field by making imports cheaper at a time when India is signing free trade agreements with a host of countries.
The IT sector, which will benefit by a further 3 per cent, had already got a major set of concessions from Finance Minister Jaswant Singh in the mini budget announced on January 8.
While Singh had reduced the peak customs duty on other products to 20 per cent, he has moved much closer to the eventual duty phase out on e-commerce products by the year 2005, with the latest round of cuts.
In the run up to the budget this year, Singh had decided to target the IT and telecom industry for sops. With the latest round of concessions the two industries have got almost the entire range of concessions that they had been pressing for.