Mobile manufacturers to continue to get incentives, government assures industry

May 19, 2017

NEW DELHI: The government has assured the handset industry that are making phones in India will continue to be incentivised even under the goods and services tax regime.

This comes after GST Council fixed rate on handsets at 12%, which meant most locally made phones would become costlier and come at par with those imported, taking away the advantage of local manufacturing and threatening millions of dollars of investments made under the Make in India push by several manufacturers.

The Ministry of Electronics and Information Technology (MeiTY) will push for imposing a basic customs duty (BCD) on top of GST rate on imported devices to ensure that making phones locally would continue to be cheaper for companies compared with imports, Aruna Sundararajan, secretary IT and telecom, told ET.

“Either the existing regime will continue or the new regime with GST plus BCD will come in — so either way the industry will not lose out,” Sundararajan said.

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