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Tax Holiday, Customs Duty Exemption, GST Cut On Handset Cos Budget Wishlist

India’s handset industry has sought a special package to help home bred companies be competitive in a market increasingly dominated by the Chinese companies and the South Korean Samsung, besides tweaking of the local manufacturing policy to push exports from the country, as part of its budget recommendations to the government.

The industry has also sought a decade-long tax holiday on profits from manufacturing devices or parts in the country to stimulate fresh investments.

The industry has also suggested that printed circuit boards assembly (PCBA) of feature phones up to Rs 1,200 should be exempted from basic customs duty till the year end, and that goods and services tax (GST) rate on bat-teries and chargers be reduced to 12% from the current 18% to 28%.

“There’s a compelling need to make a comprehensive strategic support framework of building large domestic companies in order to have a desired level of control on technology in the strategic areas,” the Indian Cellular and Electronics Association (ICEA), said in its recommendations to the government.

The association which counts companies such as Apple and Google among its members, said that Indian companies must be supported to tap into sub-$200 devices global market which is worth over $250 billion.

“A 10-year tax holiday may be granted on a block of 15-20 years on all profits and gains under Section 80 IA, for manufacturing or rendering of service or in relation to mobile handsets, its parts, components, accessories and various core components… so as to bring fresh investments in plant and machinery in SEZ, EOU and DTA,” the association said.

Mobile phone manufacturing has been the bedrock of growth of the government’s Make in India programme. In 2018-19 financial year, about 290 million phones were produced valued at Rs 1.7 lakh crore.―Business Telegraph

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