Electronics body seeks import responsibility cut on mobile phones components in budgetNew Delhi: Seeking reduction in import task on components used for making cellphones, the India Cellular and Electronics Association (ICEA) has stated that if taxes are hiked on such parts, then Indian made products under the federal government's enthusiastic production linked incentive (PLI) scheme, will become uncompetitive globally.In its dream list for the upcoming union spending plan, the ICEA has looked for a roll-back of goods and services tax (GST) to 12 percent from the present slab of 18 per cent, stating that it is a deterrent for domestic market development and is likewise preventing adoption of mobile phones by disadvantaged sections in rural India.ICEA chairman Pankaj Mohindroo in a letter to the ministry of electronic devices and IT stated that the PLI plan offers an incentive for conference partial expense disability for manufacturing in India compared to other nations such as China and Vietnam that existed before January, 2020.
Post the change in the duty structure in the union budget plans for fiscal year 2020-21 and 2021-22 the cost disability space has increased even more.
Increasing tariffs on inputs will result in serious effect on the expense structures of PLI authorized companies, rendering their item uncompetitively priced for global markets, Mr Mohindroo said.Samsung and Apple's contract producers are the most significant financiers under the PLI plan and both these brand names dominate mobile phone exports from India.The government expects cellphones worth Rs 10.5 lakh crore to be manufactured under the PLI plan.
Mr Mohindroo said that the government has introduced 15 per cent task on electronic camera lens and 2.5 percent on rest of the parts which make the cam modules production in India competitive and required rationalisation of taxes as total camera modules utilized in smart phones can be imported by paying 11 percent import duty.The industry body has actually called for rationalisation of tasks on the mom boards (printed circuit board assembly), mechanics parts, and so on utilized in mobile phones as well on elements utilized for making mobile phone accessories like Lithium ion cell for power banks, basic materials for cordless and audio devices etc.ICEA said that the hike in GST by 50 percent in March 2020 to 18 per cent from 12 per cent must be rolled back as it slows down the digital India campaign and deters growth of producers.
The GST boost of 50 percent in March 2020 was a vicious blow to the mobile industry.
The reasoning presented to the GST Council was flawed.
The sovereign assurance of no increase in cumulative tax was likewise provided a go-by with this boost.
In the pre-GST age, the excise task plus VAT was 6 per cent (in most states), and the weighted average was 7.2 per cent.
All elements, parts and devices were at absolutely no task for production, ICEA stated in the spending plan wishlist separately.According to market body ICEA, whose members include Apple, Foxconn, Wistron, Lava and Vivo, smart phone production in the country peaked at Rs 2.2 lakh crore in 2020-21 and is expected to cross Rs 2.75 lakh crore by March 2022 which will significantly satisfy need of the domestic market.
To attain the objective of mobile phones in the hands of every Indian, and to broaden a domestic mobile phone market of USD 55 billion (about Rs 4 lakh crore), it is vital to bring back the status quo ante with respect to the GST on mobile phones from 18 to 12 per cent.
This will assist put cellphones in the hands of the disadvantaged sections in rural India, and the poor as well as amongst females and youth, ICEA said.The share of Indian companies in the mobile productions has boiled down from 47 percent in 2016 to around 8 per cent at present.ICEA has actually advised government to assign Rs 1,000 crore to support Indian companies, supply them interest subvention of 5 percent for loans as much as Rs 1,000 crore, credit warranty for approximately Rs 500 crore (revolving) for repaired and working capital requirements and domestic companies falling under PLI plan need to be offered improved credit guarantee of Rs 1,000 crore.