Mobile Makers Seek Extension of Differential Pricing Rules

"We have requested government that besides continuing differential pricing on mobile phones, it should be extended to other categories as well like laptops," Foxconn India Country head Josh Foulger told reporters after a pre-budget meeting with Finance Minister Arun Jaitley Thursday.

To boost local manufacturing of mobile phones and tablets, the government in last budget increased duty benefits for domestic producers of these electronic items.

Excise duty structure for mobiles handsets was changed to one percent without CENVAT credit or 12.5 percent with CENVAT credit which gave domestic manufacturers a benefit of about 11 percent over imported phones.

The current fiscal year saw investments from manufacturing giant Foxconn in the country while many other mobile phone companies like Gionee, Xiaomi, Lava, Karbonn, HTC, Datawind, started production of their handsets locally.

"For successful Make In India campaign, we have requested a tax structure where we can focus on higher value addition in manufacturing of electronic products. We are looking for measures that can encourage development of component base in the country," Indian Cellular Association National President Pankaj Mohindroo said.

Telecom Equipment Manufacturers Association of India (TEMA) has requested government to levy duties on non-ITA (Information Technology Agreement) products as well as review duty on IT and Telecom products falling under duty free import category.

"We have also requested Finance Minister to introduce 5 percent research and development cess on user of telecom services to create a corpus for supporting R&D for technology development in telecom sector," Shyam Telecom Chairman and Managing Director Rajiv Mehrotra who led TEMA at the meeting said.

He said that in line with Make In India objective, TEMA has requested government to extend infrastructure status to domestic telecom equipment manufacturing companies complying with preferential market access (PMA) rules.

"We have also requested to extend Income Tax section 35 AD benefit to domestic telecom equipment manufacturing companies which are complying with PMA provisions," Mehrotra said.

Under PMA, a company is required to give preference to domestically manufactured components in final product.