Mobile Handset Firms Seek Reduction In GST On Components

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  • Mobile firms under the aegis of the ICEA, have written to Finance Minister Nirmala Sitharaman for the reduction in GST on mobile phone components and accessories
  • ICEA has urged the finance minister to reduce the timeframe for a refund of GST credits to at most a week
  • ICEA has also demanded input credit on manufacturing plant or shed, and canteen service, among others

Mobile handset companies have requested the government to lower goods and services tax on mobile phone components and accessories to 12 per cent from the current 18 per cent and address procedural issues that are troubling the industry.

The companies, under the aegis of the India Cellular and Electronics Association (ICEA), have written to Finance Minister Nirmala Sitharaman for the reduction in GST on mobile phone components and accessories such as back covers, batteries and headphones, to 12 per cent from 18 per cent currently.

A GST of 12 per cent is imposed on mobile phones, and higher tax on its part has led to an inverted tax structure in the segment.

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“Inverted duty structure applicable to the mobile handset industry as per the current GST regime has been impacting the manufacturing sector. The inverted duty structure has led to a serious cash flow issue for the manufacturers, which definitely impacts the manufacturing competitiveness,” ICEA Chairman Pankaj Mohindroo said in the letter, reported Business Standard.

ICEA has urged the finance minister to reduce the timeframe for a refund of GST credits to at most a week. The industry body has also demanded input credit on manufacturing plant or shed, and canteen service, among others.

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