The government will not be able to extend tax and duty related concessions to iPhone maker Apple under the new indirect tax regime as the effort is to promote Make in India and not imports, an official source said. “We have already hiked customs duty on smartphone and imports of its parts. So, it is clear that we do not want to encourage imports and rather encourage Make in India.
“With the Goods and Services Tax (GST) in place, giving separate exemptions to anyone is not possible,” the government source said. Cupertino-based iPhone and iPad manufacturer Apple has sought certain concessions for setting up manufacturing unit in India. Under the GST, which was rolled out from July 1, exemptions have been done away with and there is an uniform four-tier tax on goods and services across the country. It has also unified over a dozen local taxes, including excise, service tax and VAT.
The company had sought concessions, including duty exemption on manufacturing and repair units, components, capital equipment and consumables for smartphone manufacturing and service/repair for a period of 15 years. The technology major had also asked for relaxation in the mandated 30 per cent local sourcing of components besides reduction in customs duties on completely-knocked-down and semi-knocked-down units of devices that are to be assembled in the country.
Apple is eyeing India as it is the fastest growing smartphone market in the world. The company is looking to set up a local manufacturing unit in India to cut costs. Apple, however, does not manufacture devices on its own but gets the job done through contract manufacturers. It sells its products through company-owned retail stores in countries like China, Germany, the US, the UK and France, among others.
It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro. About 90 phone companies are currently manufacturing handsets in the country.