With Apple’s first manufacturing unit in India facing GST blues, the Centre on Saturday assured that it will “take care” of all the problems.
Ravi Shankar Prasad, Union Minister for Electronics and Information Technology said he was in talks with Apple Inc. regarding the issues that the company has voiced to get tax exemption for starting their manufacturing unit in the city.
Apple Inc. is negotiating hard with the Central Government to reach a consensus over exemption from Countervailing Duty (CVD) incurred while importing components for making iPhones. Earlier, the company’s demand for tax exemption was deferred by the Union Finance Ministry till the new goods and service tax (GST) is rolled and the decision has been put on hold for now.
Meanwhile, the company has recently stated that it is all set to start the operations of the unit, which is in partnership with a Taiwanese manufacturing firm Wistron. The Karnataka government has also been pushing hard with the Central government to allow Apple Inc. to start their facility at the Peenya Industrial Area.
Earlier, Minister of State for Electronics and Information technology, PP Chaudhury, has informed the Lok Sabha that requests made by Apple India Private Limited (AIPL) were examined in the Department of Revenue and have not been accepted and also listed the various reasons for the rejection.
In a written reply, the Minister said the exemptions sought by AIPL cannot be accepted, as with the coming into force of the new indirect tax regime “all imports will be liable to IGST (integrated GST) and any exemptions from CGST (centre), SGST (state), IGST can be granted based on the recommendations of the GST Council only.” All existing exemptions from excise duty to countervailing duty will also be reviewed by the GST Council.
AIPL has made a reference to the Department of Industrial Policy and Promotion (DIPP) seeking concessions including duty exemption on manufacturing and repair inputs, components, capital equipment including parts and consumables for smart phone manufacturing and service or repair for a period of 15 years.
In effect, the minister’s reply suggests the decision to give exemptions will have to be taken up by the Goods and Services Tax (GST) council. However, no exemption could be provided from basic customs duty (BCD), Countervailing Duty and Special Additional Duty (SAD) of Customs on imports of parts for repair of mobile phones, the minister informed the Lok Sabha.
By Baishakhi Dutta
