“The Finance Minister has given a positive signal in favour of domestic manufacturing of mobile phones”, according to Pankaj Mohindroo, National President of the Indian Cellular Association (ICA) while reacting to the interim budget announcements made by the Hon’ble FM.
The Interim Budget measure announced by the Hon’ble Finance Minister restructured duty at 6% with CENVAT credit and 1% without CENVAT credit. According to Mr. Mohindroo, “the clubbing of the two slabs, as existing earlier, i.e. under Rs. 2, 000/- MRP and above Rs. 2, 000/- MRP is a good rationalization because this will prevent under invoicing.”
However, Mr. Mohindroo has further highlighted that there will be a marginal increase in price of phones under INR 2000 MRP. For example a phone with MRP of INR 1000 will see a price rise of around INR 30.
While the announcement made by the Hon’ble FM declaring that all categories of handsets which do not avail CENVAT credit would be attracting 1% which is favouarably placed to promote manufacturing, under the current manufacturing dispensation where most of the mobile manufacturing activity is located in SEZ and EHTP zones, it is understood that there would not be any immediate benefits to accrue, as benefits earmarked under this are solely meant for units set up in DTA.
In overall terms, the interim budget announcement is expected to arouse significant enthusiasm amongst prospective investors to consider India as a manufacturing destination.
Comments
Post a Comment