Taxation on assembling of computer motherboard

This query is : Resolved

jitender (Querist)
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05 February 2009 We want to import parts and components of computer motherboard and assemble in India. Please tell whether in this case assembling amounts to manufacture under excise law. if yes how much is the excise duty is leviable and the procedure for this. Also tell how much custom duty is payable for importing the motherboard parts and components.if we sell the finished product, i.e. motherboard to clients in bangalore how much vat will be charged.

Rajesh Kumar

Rajesh Kumar (Expert)
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08 February 2009 The process of assembling shall amount to manufacture and you will be liable to pay excise duty on it. However, you shall be eligible for cenvat credit on CVD and SAD paid.
If you pay VAT on imported items, you shall be eligible for refund of SAD.
If you plan to do such activity, it will be advisable to check the rate of duties on various items, cenvat available, excise duty payable, VAT payable etc. (i.e. tax implications) as these duties form a substantial part of the cost of the goods. Professional studies before starting the work will solve save you from various headches which comes due to lack of information in these vital areas.

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