New Delhi, Nov 27: A 10 per cent drop in current PC prices would increase the demand by 30 per cent, analyst firm Skoch said today and asked the government to facilitate lowering of PC prices by reducing excise duty to eight per cent from the current 16 per cent. Drop in prices of PCs would require help from government which can reduce excise duty from the current 16 per cent to eight per cent and enhance depreciation to 100 per cent from the current 60 per cent, Sameer Kochhar, CEO, Skoch told newspersons here.

Skoch has also sought removal of the four per cent special additional duty. Stating that India has the highest tax rate on PCs in Asia-Pacific at 35 per cent against 0-17 per cent in other countries of the region, he said this has led to a flourishing grey market at 61 per cent.
The cut in excise duty and rise in depreciation levels will result in an inflection point with grey market going down to 20 per cent by 2006 and a 26 per cent rise in excise collection by bringing the grey market into excise net and raise volume during the same period, Kochhar said.
"Cost is the biggest culprit with 24-35 per cent of price of a PC goes towards taxes -- 16 per cent excise duty, four per cent special additional duty, sales tax, octroi, turnover tax", he said. Bureau Report