Mobile phone industry seeks tax rationalisation, clarity on export scheme

Mobile phone industry on Monday sought clarity over recent reduction in export incentives and demanded rationalisation of tax structure, including GST on handsets, during a pre-budget meet with Finance Minister Nirmala Sitharaman. According to India Cellular and Electronics Association (ICEA), reduction in export incentives will lead to massive job losses.

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ICEA on the mobile phone industry

On the meeting, ICEA Chairman Pankaj Mohindroo said the government has strong intention to support Indian companies as well as attract global brands to make the country a hub of mobile manufacturing.

"Regarding export benefits... we have requested that the air be cleared. There is an incentive package being worked out for global value chain and Indian companies to meet mobile export target of USD 110 billion as per National Policy on Electronics. We have put forward a request (on this) strongly," Mohindroo said.

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The meeting was attended by technology sector industry bodies ICEA, MAIT, NASSCOM, Telecom Equipment Manufacturers Association, Indian Private Equity and Venture Capital Association besides representatives from Apple, Lava International, Reliance Jio etc. On December 7, the DGFT reduced export incentive on mobile handsets from 4 per cent to 2 per cent. "We have requested that basic customs duty on high phones be capped at Rs 4,000.

We are witnessing lot of grey market being developed which should be stopped," Mohindroo said. The mobile phone industry has also requested the finance minister to rationalise GST on mobile handset priced below Rs 1,200 to 5 per cent from 12 per cent at present as it will benefit 15 crore people who buy feature phones, Mohindroo said.

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