ThinkStock PhotosA letter sent by the ministry of electronics and information technology (MeitY) to the department of revenue in March this year has highlighted apparent differences on the validity of customs duty levies on a key component in cellular phones, the touch panel or cover glass.
The seeming differences in views between the two departments, government and industry executives say, is relevant for duty evasion notices that the Directorate of Revenue Intelligence (DRI) has served on Chinese smartphone majors Oppo and Vivo.
The impact may not be confined to Chinese firms and could potentially disrupt India's aspirations of becoming an electronics manufacturing hub, if issue is not resolved immediately, industry officials said. A revenue department official confirmed receiving the letter, saying, "they will look into concerns of the industry."
After the MeitY letter, an industry body representing smartphone companies in India wrote to the revenue department, the Prime Minister's Office and the IT ministry in June, describing the duty demands as "preposterous".
The smartphone industry expects other companies to face similar notices. It warned that the issue could hurt the industry to the tune of Rs 20,000 crore, and impact India's image.
On July 13, the DRI issued a notice to Oppo, demanding Rs 4,389 crore of customs duty, citing wrongful misdeclaration of items imported. A spokesperson at Vivo told ET that it had also received a similar notice. The company is reviewing the notice, will cooperate with authorities and "follow the course of law as required", the Vivo spokesperson said. Oppo, in a media statement, said it held a different view on the charges, and that it was an industry-wide issue many corporates were working on. The company will take appropriate steps including legal remedies, it said.
The seeming differences in views between the two departments, government and industry executives say, is relevant for duty evasion notices that the Directorate of Revenue Intelligence (DRI) has served on Chinese smartphone majors Oppo and Vivo.
The impact may not be confined to Chinese firms and could potentially disrupt India's aspirations of becoming an electronics manufacturing hub, if issue is not resolved immediately, industry officials said. A revenue department official confirmed receiving the letter, saying, "they will look into concerns of the industry."
After the MeitY letter, an industry body representing smartphone companies in India wrote to the revenue department, the Prime Minister's Office and the IT ministry in June, describing the duty demands as "preposterous".
The smartphone industry expects other companies to face similar notices. It warned that the issue could hurt the industry to the tune of Rs 20,000 crore, and impact India's image.
On July 13, the DRI issued a notice to Oppo, demanding Rs 4,389 crore of customs duty, citing wrongful misdeclaration of items imported. A spokesperson at Vivo told ET that it had also received a similar notice. The company is reviewing the notice, will cooperate with authorities and "follow the course of law as required", the Vivo spokesperson said. Oppo, in a media statement, said it held a different view on the charges, and that it was an industry-wide issue many corporates were working on. The company will take appropriate steps including legal remedies, it said.
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