1. Home >
  2. Export Import News >
  3. Foreign Exchange >
  4. Local handset makers seek state sops to encourage production >
  5. Local handset makers seek state sops to encourage production

Online Export Import Data Search

Recent Searches: No Recent Searches
Complete Training Video : Click Here

Local handset makers seek state sops to encourage production.

Date: 06-08-2018
Subject: Local handset makers seek state sops to encourage production
NEW DELHI: A handset lobby body has warned the government of a risk of losing Rs10,000-15,000 crore of future investments in mobile manufacturing, if the system of state incentives is not revived in some manner under the goods and services tax regime. 

In a recent letter to cabinet secretary Pradeep Kumar Sinha and Niti Aayog vice chairman Rajeev Kumar, the Indian Cellular Association (ICA) said the incentives for local manufacturing has virtually collapsed after the introduction of GST, , and urged the government to “honour its commitments” to support the Make in India programme. 

ICA chairman Pankaj Mohindroo said the transition from VAT to GST created an unintended, but serious, issue which is hurting the image of India as a whole and state governments in particular on living up to commitments, and impacting future investments because of lack of clarity on rules. 

The body termed mobile phones and components as the champion sector in ‘Make in India’, with more than 120 plants mushroomed in the last three years, encouraged by policies to boost local manufacturing. If things go as per plans under the phased manufacturing programme, some Rs22,000-23,000 crore more of investments are expected in the next three years. 

Almost 90% of all handsets currently sold in India are locally manufactured, according to Counterpoint Research. 

Outlining the issue, the ICA said in the earlier VAT system, state governments could incentivise manufacturing under which they had powers of levy, exemption and disbursement of VAT revenue as incentives. But under GST, this is not possible since there is only one common law to be followed by both the central and state governments. 

To attract investments, most state governments were offering VAT reimbursements primarily linked to fixed capital investments, or reimbursement commitments for 5-7 years. Central sales tax was also usually a part of this incentive. 

Under GST, an SGST refund mechanism was mentioned as an alternative and successor to VAT refund. The ICA, however, said now the actual SGST payment has become nil because most of the transactions are taking place in the IGST mode and raw material or input purchases are either imports or from outside the state. 

Moreover, the IGST rates are further inverted in many cases — for example battery packs are at 28% against the final product of 12%, it said, adding: “This makes the case even worse.” 

“Now, it's a no man's land situation. The Centre is saying that it's a state government issue, while states say it (inability to give incentives) is because of GST,” Mohindroo said. 

The lobby body, in its short-term recommendations to the GST Council to resolve the matter, asked for an exemption for import and domestic IGST on electronic manufacturing only for components/inputs under the actual utilisation condition. 

Such a move, the ICA said, will not entail any revenue loss to the government but will ease the cash flow situation for actual manufacturing and will re-energize SGST reimbursements without any associated problems. “What will emerge in this situation will be that actual SGST payments will start getting made in cash and eventually the reimbursement issue will somewhat get sorted out.” 

The ICA has also urged state governments to refund the portion of the incentives which may have accrued, based on the VAT rate and theoretical calculation till the authorities arrive at a clear policy for the future. 

“We would request you and all the major states to take the matter up very urgently and resolve the same for the period 1-7-2017 when GST was introduced till date and also arrive at a final solution for the future. This will redeem India’s image,” Mohindroo said. 

Source: economictimes.indiatimes.com

Get Sample Now

Which service(s) are you interested in?
 Export Data
 Import Data
 Exim Help

What is New?

Date: 22-05-2020
Notification No. 47/2020-CUSTOMS (N.T.)
Appointment of CAA in case of in case of M/s Satnam Steels, Rajkot.

Date: 22-05-2020
PUBLIC NOTICE No. 06/2015-2020
Inclusion of Gopalpur Port, Odisha as a Port of Registration under Para 4.37 of Handbook of Procedures, 2015-2020.

Date: 22-05-2020
TRADE NOTICE NO. 12/2020-2021
Issuance of Preferential Certificate of Origin for India’s exports to Thailand and Vietnam under ASEAN-India FTA

Date: 21-05-2020
Notification No. 24/2020 - Customs
Seeks to amend notification No. 56/2000-Customs dated 05.05.2000, No. 57/2000-Customs dated 08.05.2000 and No. 40/2015-Customs dated 21.07.2015 providing for extension of last date of export by six months, for those cases where the last date of export falls between 01.2.2020 and 31.7.2020 due to the outbreak of COVID-19 pandemic.

Date: 21-05-2020
Notification No. 25/2020 - Customs
Inclusion of Gopalpur Port [INGPR1] as notified port for getting benefits under AA/ EPCG schemes and other export incentive schemes like MEIS/SEIS and other such schemes.

Date: 21-05-2020
Notification No.46/2020 - Customs (N.T.)
Exchange Rates Notification No.46/2020-Custom (NT) dated 21.05.2020.

Date: 20-05-2020
Instruction No. 06/2020-Customs
Instruction Number 06 - Customs on Requirement of Veterinary Certificate

Date: 19-05-2020
Notification No. 45/2020-CUSTOMS (N.T.)
Tariff Notification in respect of Fixation of Tariff Value of Edible Oils, Brass Scrap, Poppy Seeds, Areca Nut, Gold and Silver- Reg.

Date: 19-05-2020
Notification No. 08/2020-Customs (ADD)
Seeks to impose anti-dumping duty on import of Sodium citrate originating in or exported from China PR for a period of further 5 years.

Date: 18-05-2020
A.P.(DIR Series) Circular No.31
Risk Management and Inter-bank Dealings – Hedging of Foreign Exchange Risk-Date of Implementation

Exim Guru Copyright © 1999-2020 Exim Guru. All Rights Reserved.
The information presented on the site is believed to be accurate. However, InfodriveIndia takes no legal responsibilities for the validity of the information.
Please read our Terms of Use and Privacy Policy before you use this Export Import Data Directory.


C/o InfodriveIndia Pvt Ltd
F-19, Pocket F, Okhla Phase-I
Okhla Industrial Area
New Delhi - 110020, India
Phone : 011 - 40703001