Basic custom duty (BCD) has been exempted in several parts and components of electronic equipment including set top boxes (STBs) for television or internet. This measure is a major relief to the cable television and industry which will also boost digitization.

Presenting his budget for 2016-17, Finance Minister Arun Jaitley announced that parts and components, subparts for manufacture of routers, broadband modems, STBs for gaining access to internet, STBs for TV, digital video recorder (DVR)/network video recorder (NVR), CCTV camera/IP camera, lithium ion battery [other than those for mobile handsets] are being exempted.

The excise duty on the above has been changed, falling from 12.5 per cent to four per cent. He also said excise duty on parts and components, subparts for manufacture of the above mentioned items was being exempted from the current 12.5 per cent. The service tax on the services of Information Technology software on media bearing RSP, are being exempted, provided appropriate Central Excise duty is paid with effect from 1 March.

The mutual exclusiveness of levy of excise duty and service tax on information technology software has been ensured by exempting from excise duty only that portion of the transaction value on which service tax is paid, with effect from 1 March. Thus, it remains at 14 per cent.

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