Indian Handset Body Asks Govt To Bring Reform In Custom Duties And GST

After requesting a special package to help revive local handset makers before the budget, India’s top handset body in its post-budget statement asked the government to bring reform in customs duties and GST for the parts and components industry, especially with regard to classification matters.

India Cellular & Electronics Association suggested that the GST rates be reformed in the supply chain and requested the government to have a single tax of 12 percent in the long supply chain to facilitate manufacturing and avoid inverted GST.

Roadmap Ahead

ICEA chairman Pankaj Mohindroo said that the government should not wait for the results of the elections since the measures are doable in the short-term.

This link in the chain is very much visible today with taxes ranging from 12 per cent-18 per cent-28 percent which creates imbalance and discontinuity, commented Mohindroo post the Union Budget. ICEA also requested urgent action to contain the alarming increase in the grey market in the high-end phones.

Mohindroo informed that the market growth is not as healthy as desired with the share of the local brands falling at an alarming rate. Further, the growth of the parts and components industry requires a lot of rationalization with inverted duty feasible, especially in the GST sphere, said Mohindroo.

Before the budget, ICEA sought a special package for local handset makers which could help the companies tap the USD 250-billion global opportunities in the entry-level smartphone segment.

The handset body had asked for allowance of zero-duty import of second-hand capital goods under the Export Promotion Capital Goods scheme to ease import of used equipment with at least 80 percent residual value while ensuring fast track clearance. —ElectronicsB2B