More reports on: Telecom

No sops for Apple under GST regime, Centre clarifies

10 October 2017

The government will not be able to extend tax and duty-related concessions to Apple Inc under the new GST indirect tax regime as the effort is to promote Make in India and not imports, an official source told PTI.

''We have already hiked customs duty on smartphones and imports of their parts. So it is clear that we do not want to encourage imports but rather encourage Make in India,'' the source said.

''With the Goods and Services Tax (GST) in place, giving separate exemptions to anyone is not possible,'' the source added. Cupertino, California-based iPhone and iPad manufacturer Apple has sought concessions for setting up a manufacturing unit in India.

Under the GST, which was rolled out from 1 July, exemptions have been done away with and there is a uniform four-tier tax on goods and services across the country. It has also unified over a dozen local taxes, including excise, service tax and value-added tax (VAT).

Apple has sought concessions including duty exemption on manufacturing and repair units, components, capital equipment and consumables for smartphone manufacturing and service / repair for a period of 15 years.

The technology major had also asked for relaxation in the mandated 30 per cent local sourcing of components, besides reduction in customs duties on completely knocked-down and semi knocked-down units of devices for assembly in the country.

Apple cannot afford to ignore India as it is the fastest growing smartphone market in the world. The company is looking to set up a local manufacturing unit in India to cut costs.

Apple does not manufacture devices on its own but gets it done through contract manufacturers. It sells its products through company-owned retail stores in countries like China, Germany, the US, the UK and France, among others.

It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.

About 90 phone companies are currently manufacturing handsets in the country.

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