Mobile phone makers have sought a zero duty/tax regime for promoting local manufacturing in the country. Indian mobile phone market of 20 crore mobiles was valued at nearly Rs 50,000 crore in 2012, but imports occupy nearly two third of the market at present.
“There should be zero customs, excise, service tax on all inputs and final products and capital goods for the mobile industry,” said Pankaj Mohindroo, President, Indian Cellular Association, the industry body representing big brands, including Nokia and Samsung.
Zero duty eco-system
The ICA has also sought zero duty eco-system for manufacturing of parts and accessories and service industry. “Concern is that the manufacture of parts, components and accessories has to go up substantially, so that we can leverage this large domestic and global market. There is no manufacture of parts and components or accessories in India except batteries and chargers to some extent,” ICA said in its pre-Budget proposals for 2013.
The association has also sought service tax exemption on data services through mobile networks. “This is a must to promote investment in this sector. This will also promote manufacture of smartphone/tablet PC for the common man. At present, these services are restricted to the elite on account of the high cost,” Mohindroo said. ICA has suggested that all 7-inch tablets and smart phones/tablets sold to the Government for the purpose of education should be exempted from all duties and taxes. “This exemption may not be extended to imported tablets — thus making domestic manufacturing a more attractive option,” ICA said. Most of the tablets being sold in the market by Indian brands are currently imported from China.
Phone makers’ association said the Government should focus on creating a mobile governance innovation fund to support the development of suitable applications by Government departments and agencies. It also said that Government should subsidize the sale of devices in the rural areas.
“This subsidy can be after activation through e mail or computer connectivity through internet. Such a move will definitely give a boost to several Government initiatives like “Right to education,” e-Governance and financial inclusion projects,” Mohindroo said.
ICA has sought a ten-year tax holiday on all profits and gains from manufacturing or rendering of services in relation to the mobile phone industry. The measure should be applicable on fresh investment on or after April 1, 2012 in plant and machinery and other equipment of a durable nature for the manufacturing, it said.
thomas.thomas@thehindu.co.in