Revenue Secretary Hasmukh Adhia says it would be difficult to give Apple a 15-year exemption on countervailing duty on imported components, as GST does not allow for individual exemptions.
With India set to implement the goods and services tax (GST) later this year, it may be tough for the government to accept Apple’s demand for a 15-year exemption on countervailing duty (CVD) on imported components, Revenue Secretary Hasmukh Adhia told The Economic Times.
“There is no way we can give individual exemptions under the GST regime,” Revenue Secretary Hasmukh Adhia was quoted as saying in the report, adding that all the CVD exemptions would go.
Countervailing duty is levied as part of import duty in lieu of central excise duty. GST, which is set to come into effect on July 1, will absorb central taxes such as central excise duty, services tax, countervailing duty and state taxes including value-added tax, octroi and purchase tax.
“Whatever the tax on local industry, the same will become IGST or integrated GST that will be levied on inter-state trade,” he said. "Make in India will get a big boost. We have been unfair to local industry. I don’t know what exactly Apple’s demand is as DIPP (Department of Industrial Policy and Promotion) is dealing with them. But we have limitations on giving exemptions under GST."
Adhia said the final call on the exemption will be taken by the GST Council.
Apple held talks with the government on January 30 to start making its popular iPhones in India, and listed a number of demands which wants to be met before setting up factories in the country.
On Saturday, Prime Minister Narendra Modi tweeted a media report which said that the California-headquartered technology giant would start manufacturing in Bengaluru soon. But there has been no official confirmation yet
Apple wants the exemption as its components makers may not relocate immediately to India, increasing its dependence on imported parts.
The government had removed CVD exemption for three components in the last Budget, but restored it following industry demand. The exemption has now been abolished to boost the Make in India programme.
Time to show-off your poker skills and win Rs.25 lakhs with no investment. Register Now!