Electronics cos push for tax rationalisation in Union Budget 2023 - The Economic Times

The electronics industry wants the government to rationalise tariffs and remove what it called small "nuisance" tariffs of 2.75% on parts and components of mobile phones, sub-assemblies, and mechanics, and reduce Goods and Services Tax (GST) to 12% from 18%.

In a letter to the government, India Cellular and Electronics Association (ICEA), representing major electronics manufacturing companies, also sought that the 20% basic customs duty on high-end phones be pegged at '4,000 per device, in a bid to check smuggling of high-end phones, which it said will add '1,000 crore to GST collection. The association has asked for a review of the existing tariff structure for electronics manufacturing, recommending a comprehensive study to assess and evaluate the existing tariff on products, as part of its recommendations for the upcoming union budget 2023-24. "Tariffs are becoming a major challenge in improving India's competitiveness in manufacturing for global supplies where we are lagging Vietnam, Thailand, and Mexico, among others," the ICEA said.
ET has reviewed a copy of its letter.

"We emphasise in case of small tariffs, the traditional understanding of tariffs as protecting domestic industry fails. We request particular attention to parts of PCBA (printed circuit board assembly), connectors, and particularly camera modules," it said. To increase localisation of manufacturing, the association has recommended removal or a reduction in smaller "nuisance" tariffs of 2.75% on input components.

"The stability of tariffs for inputs is paramount for the industry; however, the constant tinkering in tariffs for inputs has made it very difficult for manufacturers in India to operate in a viable manner. The exemption notification itself should have a sunset of at least five years," ICEA said.

The electronics industry demanded that products not made in India should be exempted from all duties.

Adblock test (Why?)