Implementation of goods and service 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 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 percent.
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.
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.
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.
By Baishakhi Dutta
