Amid concerns over reduced tax benefits to mobile phone makers under GST, IT Secretary Aruna Sundararajan said there is a need to build upon the momentum in electronics manufacturing in the country.
According to PTI, Sundararajan after releasing a joint study by Broadband India Forum (BIF) and EY said that India has missed some of the earlier revolutions, electronics manufacturing is an opportune moment for us. The kind of early momentum that we have already, make sure that is sustained, accelerated and built upon.
She added that India is a large market and I think that growth of electronics consumption in country is going to grow exponentially, specially with the kind of thrust that we are placing on whole Digital India set of initiatives. But demand is still small, that is what global majors are saying.
As per the study on ‘Incentivising Domestic Handset Manufacturing Under GST’, adoption of smartphone in India is expected to reach 688 million by 2020 as compared to 238 million in 2015.
BIF President TV Ramachandran said that the broadband device today is a smartphone. We need to increase smartphone penetration as India has today less than 30 percent smartphone penetration. This can only happen through local manufacturing and by further increase of local value addition.
Government provides differential duty benefit to indigenous mobile manufacturers. In 2014-15, government introduced a duty differential structure on mobile handsets, wherein the rate of excise duty was reduced to 1 percent from 6 percent subject to the condition of non-availment of CENVAT credit on the inputs and capital goods used in manufacturing of the goods. Subsequently, in 2015-16, the differential was enhanced to 11.5 percent by raising the CVD rate to 12.5 percent.
