Mobile phone cos pitch for tax holiday, duty cut

  • M Rajendran, Hindustan Times, New Delhi
  • Updated: Dec 24, 2014 22:07 IST

Mobile handsets costs could come down, if the government decides to accept a few from the slew of recommendations made by the Indian Cellular Association (ICA) — the apex body representing the country’s mobile handset makers.

ICA has made a strong pitch for 10-year tax holiday and immediate removal of the tax freeze imposed on Nokia’s manufacturing plant in Chennai.

Pankaj Mohindroo, national president, ICA has written an exhaustive letter to Prime Minister Narendra Modi, seeking a large number of reforms in the handset manufacturing sector.

Mohindroo has proposed setting up of a fast track task-force under the guidance of communications minister Ravi Shankar Prasad. “We strongly believe, that the mobile phone segment is a low hanging fruit in the electronic hardware ecosystem, which can be harvested in a short period,” Mohindroo said in the letter.

Among the major recommendations suggested by ICA include accepting technology convergence and adopting the same duty structure across laptops, tablets and mobile phone. The association has also sought removal of dividend distribution tax (DDT), easy financing schemes for mobile devices by banks and exemption of all goods used in manufacturing mobile phones, tablets and laptops from basic countervailing duty (CVD) and special additional duty (SAD).

These measures can also help curb the grey market for mobile phones in India, the letter said.

Requesting the immediate lifting of asset freeze on Nokia’s Chennai plant, Mohindroo pleaded that it will help in employment generation. “It will also help limit damage to its (India’s) reputation as a good destination for investment,” said Mohindroo.

ICA has assured the Prime Minister that India can achieve 25% market share in global mobile phone manufacturing by 2019.

This can translate into additional jobs for 1.3 million people resulting in an annual industry turnover of $25-50 billion (Rs 1,58,750-Rs 3,17,500 crore) with a significant portion being exported out of India.

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