Budget 2012: Mobile handset makers want uniform GST rate


12 Jan 2012
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Budget 2012: Mobile handset makers want uniform GST rate

NEW DELHI: Concerned over different VAT rates on mobile handsets in different states, device manufacturers have demanded a uniform GST rate on handsets in the upcoming Budget.

Presently, "the value added tax (VAT) varies by state between 4-15 per cent for mobile phones. Also some states have higher VAT structure for products above and below Rs 10,000," Huawei Marketing Director Anand Narang said. He added that the company "expects this to be rationalised."

Echoing similar sentiments, Micromax Informatics Limited CEO Deepak Mehrotra said, "We would welcome a move from multiple VAT rates to a uniform GST applicable across the country."

BlackBerry-maker Research in Motion (RIM) said it is witnessing a huge surge in the smartphone space and if the government changes the tax structure, it will help penetrate smartphones to a wider customer base.

"Government can play a vital role by re-considering the taxation module on mobile devices," RIM Managing Director Sunil Dutt said.

Micromax has also sought a policy initiative to promote domestic manufacturing of handsets. "India being a large market, can evolve as a manufacturing hub. This would have the attendant benefit of spillover growth in the adjacent electronic/component industries," Mehrotra of Micromax said.

He added that stability of rupee will be a major concern as their sourcing is denominated in US dollar and the recent fluctuation in the value of rupee has disturbed the industry.

China's Huawei has also sought uniform and reduced custom duties for tablets that are used across various sectors. Presently, tablets with and without voice capabilities attract different and higher import duties, Narang said.

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