The Manufactures Association for Information Technology (MAIT) has urged the government to abolish the central sales tax on all IT products and formulate a stable policy for the IT hardware industry.

The impact of Central Sales Tax (CST) cost creates an additional barrier to PC sales. The government should therefore immediately abolish CST on all IT products, the apex body for IT hardware sector said in its pre-budget memorandum. MAIT has also asked the government to widen the scope of availing credit of the countervailing duty (CVD)/Excise duty paid on personal computers and other IT equipment.
Currently, computers are classified as Capital Goods under the CENVAT Credit Rules, 2004, whereby the credit is available only if the computer is used in the factory of the manufacturer of the final products. 

PCs in India currently face a 4 percent CST for both manufacturers and service providers. MAIT has recommended that various service sectors such as banking and insurance, hospitality and leisure, and education that are large PC consumers but do not currently qualify for the beneficial rate of 3 percent CST should also be allowed the same benefit. 

The government's providing with a favourable duty regime with appropriate incentives for component manufacturers in India would have a positive impact on the industry, the memorandum said.