Intel Corporation seems to have won a battle but is all set to lose the war against Delhi Customs over the duty dispute involving Celeron and Pentium II chip imports. India’s finance ministry, not convinced by the department of electronics’ argument that Intel’s new chips are large integrated circuits (ICs) that attract lower duty, feels that these chips should be categorized as populated printed circuit boards. PCBs attract 20% basic custom duty, additional duties plus counter vailing duty (CVD). However Customs officials at Delhi, classified the new generation technology as computer parts, which attract 10% basic custom duty plus 13 CVD plus 5% special custom duty and 4% special additional duty, taking the duties even higher then the finance ministry recommendations. Since the Celeron and Pentium II are high volume items as they are used in almost every PC sold in the country, the total extra burden on the corporation would be in the range of $5m-$6m. Another importer, Cyrix, would also have to bear the additional burden. But given the government resolve to spread IT awareness, a decision in favor of Intel cannot be ruled out.
