ICEA demands reduction in import duty on parts for making mobile phones
By MYBRANDBOOK
Industry body The India Cellular and Electronics Association (ICEA) has said that increase in taxes on components will make the products manufactured in India under the production linked incentive (PLI) scheme globally uncompetitive.
The ICEA has demanded roll-back of goods and services tax to 12 percent from 18 percent at present as it is an obstruction for growth of domestic market and manufacturers as well as checks in adoption of mobile phones by disadvantaged sections in rural India.
In a letter to the Ministry of Electronics and IT, ICEA Chairman Pankaj Mohindroo stated, “Post the change in the duty structure in the Union Budgets for financial year (FY) 2020-21 and FY 2021-22 the cost disability gap has increased further. Increasing tariffs on inputs will lead to serious impact on the cost structures of PLI approved companies, rendering their product uncompetitively priced for global markets.”
He further said that the PLI scheme offers an incentive for meeting partial cost disability for manufacturing in India compared with other countries such as China and Vietnam that existed before January, 2020.
The industry body has called for elucidation of duties on the mother boards (printed circuit board assembly), mechanics components, etc used in mobile phones as well on components used for making mobile phone accessories like Lithium-ion cell for power banks, raw materials for wireless and audio devices etc.
In the budget wishlist separately, ICEA said, “GST increase of 50 percent in March 2020 was a cruel blow to the mobile industry. The rationale presented to the GST Council was flawed. The sovereign assurance of no increase in cumulative tax was also given a go-by with this increase. In the pre-GST era, the excise duty plus VAT was 6 percent (in most states), and the weighted average was 7.2 percent. All components, parts and accessories were at zero duty for manufacturing.”
It further added, “To achieve the goal of smartphones in the hands of every Indian, and to broaden a domestic mobile phone market of USD 55 billion (about Rs 4 lakh crore), it is imperative to restore the status quo ante with respect to the GST on mobile phones from 18 to 12 per cent. This will help put mobile phones in the hands of the disadvantaged sections in rural India, and the poor as well as among women and youth.”
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