The Centre on Monday informed the Parliament that it did not accept requests regarding rebate in customs duty on import of equipment for manufacturing mobile phones including Apple's iPhone.
“... the requests regarding rebate in customs duty on import of equipment were examined and the same were not accepted...,” Commerce Minister Nirmala Sitharaman informed the Lok Sabha in a written reply.
Foreign investment up to 100 per cent is permitted for a company engaged in the business of manufacturing mobile phones. However, the Government received representations seeking concessions including 30 per cent local sourcing of component, duty exemption on manufacturing and repair units, components, capital equipment and consumables for smart phone manufacturing and service/ repair, the Minister said.
With regard to local sourcing requirement, she said in case of ‘state-of-art’ and ‘cutting-edge technology’, sourcing norms can be relaxed subject to Government approval. However, to promote domestic manufacturing capacities and value addition, this relaxation will be valid for three years from the opening of first store — thereafter such entities will be required to meet the domestic sourcing norms, she said.
The Minister was responding to a question on whether some foreign companies are making efforts to set up iPhone and other manufacturing units in India, and if they are demanding to end the condition of 30 per cent local sourcing of component and rebate in customs duty on import of equipment.
The Minister said requests regarding rebate in customs duty on import of equipment were not accepted on the grounds including that nil Basic Customs Duty (BCD), nil Excise Duty /Countervailing Duties (CVD) (except charger, battery, and speaker) and nil Special Additional Duty (SAD) has already been prescribed for components and accessories and sub-parts for manufacture of parts, for the final manufacture of mobile phones/tablet computers. Besides, there is no exemption from BCD, CVD and SAD on imports of parts for repair of mobile.
Further, in Goods and Services Tax regime, all imports will be liable to Integrated GST and any exemptions from Central GST/State GST/IGST can be granted only based on the recommendations of the GST Council. Thus, all existing exemption from excise duty will also be reviewed by GST Council, the Minister said.
Moreover, with effect from July 2017, 10 per cent BCD has been imposed on cellular mobile phones and their specified parts namely charger/adaptor, battery pack, wired headset, microphone and receiver (except side key on which 7.5 per cent BCD was imposed). Further, exemption from BCD has been provided for inputs and raw materials for manufacture of all parts of cellular mobile phones. In addition, with effect from July, both domestically manufactured cellular mobile phones and imported cellular mobile phones and parts for manufacture of phones attract 12 per cent GST.