The prices of your Apple iPhones and Samsung Galaxys are likely to go up once the crucial Goods and Services Tax (GST) reform comes into place as the government is mulling a proposal to levy customs duty on the import of these devices.
According to a report by The Economic Times, such a levy is expected to take the prices of smartphones up by 5 - 10%. The government is hoping to roll out the GST tax reform which aims to subsume majority of the indirect taxes and replace them with a uniform tax structure in the country, by July 1, 2017.
The move will give a boost to local manufacturing, encourage companies like Apple to make in India, and keep Chinese companies at bay, the report said.
According to it, an inter-ministerial committee with representatives of the finance, telecom, IT, and commerce ministries have been set up to examine the issue in detail.
At the same time, Finance Minister Arun Jaitley proposed the removal of countervailing duty on electronic components imported from overseas which would also help local manufacturing as input cost would come down.
Several smartphone companies have set up assembling units in the country on the back of Prime Minister Narendra Modi's Make in India program. According to a report by The Hindustan Times, "The value of mobile phones assembled in India has increased 373% in the last two years fro, Rs 19,000 crore in 2014-15 to over Rs 90,000 crore in 2016-17 About 40 mobile phone making plants have started since Modi announced Make in India in September 2014. These plants manufacture 20 million phones every month."
Lenovo, Huawei, Motorola, all assemble their phones in the country.
While the government has been urging Apple to make its smartphones in the country, the Cupertino-bsaed company is looking for several tax concessions from the government to set up a manufacturing unit here. As it stands, Union IT Minister Ravi Shankar Prasad is slated to meet Apple's officials to discuss the plans soon.
"A lot of big mobile phone manufacturing companies have come, and if Apple comes fine, they are welcome," he said recently. He added, "They (Apple) are very keen. Its executives are going to meet me in a coule of days."
Prasad said 72 global telecom firms had started production in the country over the last two years.
Source: Daily News Analysis