While there are controversies around Apple’s demand of various tax sops to set up manufacturing plant in India, the Prime Minister’s Office may soon take a final decision on the same.
According to highly placed sources in the government, the PM had already agreed to Apple setting up its plant in a meeting with CEO Tim Cook last year, and now the matter can be put on the PM’s table again.
“The requests of Apple are under consideration of the government,” a top government official told
Multiple sources also said the decision may soon come along with the rolling out of the GST, as the hurdles are about tax exemptions, which some departments such as the DIPP has said no to.
For instance, on whether the government is ready to accept most of the demands, Commerce and Industry Minister Nirmala Sitharaman had on Wednesday answered in the negative. However, she did not clarify whether the government will reject all demands or accept some of them.
On the other hand, Aruna Sundarajan, Secretary of Ministry of Electronics and IT (MeitY), had recently said Apple will be setting up the manufacturing plant, and “it’s just the question of when”.
Apple’s ‘state-of-the art technology’ definition may also lead to some favourable changes in the policies, said the official.
MeitY, in its Budget recommendations to the Finance Ministry, had also made a request for Apple India Private Limited to manufacture iPhones in India, and all capital goods for manufacture of mobile handsets be exempted from basic customs duty (BCD) and countervailing duty (CVD). However, the request was not approved by the Department of Revenue in the Budget.
Currently, there are three exceptions — headphones, chargers and batteries — that are subject to CVD since last year. Apple’s request entails the removal of all forms of existing and future duty for all components, including the three that are subject to CVD for next 15 years.
“As part of their activity they (Apple) are looking to import, repair and re-export goods originally manufactured in and outside India. India restricts the re-import of units more than three years from the date of export. They are seeking approval to remove this restriction,” said a senior official.
Right now, all inputs for manufacturing mobile handsets (except chargers, batteries, headphones) are exempted from BCD and CVD/excise duty. However, no manufacturing loss is permitted for zero-duty import.
Meanwhile, industry sources said Apple is ready to start its manufacturing line at the Bengaluru facility (through Foxconn) next month and roll out some of the handsets over the next 2-3 months.