The growth of the parts and components industry requires a lot of rationalization with inverted duty feasible, especially in the GST sphere.
The handset body of India has recently in their 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.Before the budget, ICEA sought a special package for local handset makers which could help the companies tap the $250-billion global opportunities in the entry-level smartphone segment.
According to a news report, the India Cellular & Electronics Association has suggested that the GST rates be reformed in the supply chain and requested the government to have a single tax of 12% in the long supply chain to facilitate manufacturing and avoid inverted GST.
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.Â
Road map 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 per cent which creates imbalance and discontinuity. ICEA also requested for urgent action to contain the alarming increase in the grey market in the high-end phones
He 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.
