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Imported mobile,tablets price may go up, local producers gain

Sanjanaa at mobile app launch

New Delhi: In a move to boost local manufacturing of mobile phones and tablets, the government today increased duty benefits for domestic producers of these electronic items.

Excise duty structure for mobiles handsets, including cellular phones, is being changed to 1 per cent without CENVAT credit or 12.5 per cent with CENVAT credit, Finance Minister Arun Jaitley said while presenting the Budget in Parliament.

Earlier the duty structure for mobiles was 6 per cent with CENVAT credit.

For tablet computers, the duty structure is “2 per cent without CENVAT credit or 12.5 per cent with CENVAT credit.”

“Manufacturer or producer of final product is allowed to take CENVAT credit. This would encourage local manufacturing rather then import,” IESA Chairman Ashok Chandak told.

Local manufacturer can claim duty benefits on VAT paid on purchase of various input materials.

The increase in CENVAT credit will give benefit to domestic manufacturers against those importing such items.

The minister also announced to exempt “parts, components and accessories, falling under any Chapter, for use in the manufacture of tablet computers and their subparts for use in manufacture of parts, components and accessories, ” from “BCD (basic custom duty), CVD and SAD.

“All goods except populated PCBs, falling under any Chapter of the Customs Tariff, for use in manufacture of ITA bound goods from 4 per cent to Nil,” Jaitley said.

Indian Cellular Association National President Pankaj Mohindroo said that government’s announcement on CENVAT leads to increase countervailing duty on imports to 12.5 per cent on imposed on imported mobile and tablets which is going to make strong case for manufacturing within country.

“Increase in CVD will increase price of imported products but domestic manufacturers like Samsung and Micromax stand to gain from this,” Mohindroo said.

Government has also removed special additional duty on components of tablet which ICA National President said is a  great advantage for domestic manufacturers.

ELCINA Electronics Industries Association of India said that not exempting printed circuit board from SAD will encourage local sourcing of components and is a positive step for domestic manufacturing.

“Continuing SAD on populated PCB will encourage people to gets them made in India. This will boost domestic electronic manufacturing services,” ELCINA Secretary General Rajoo Goel said.

In addition to this blanket announcement to reduce corporate tax from 30 per cent to 25 per cent also rejoiced industry players.

“Reduction of corporate tax to 25 per cent will make up more competitive with other Asian economies where bulk of manufacturing investment was going,” Mohindroo said.

Revenue from communication services pegged at Rs 42,865 cr

New Delhi: The government expects a revenue Rs 42,865.62 crore from communication services in FY 2016, which include proceeds from spectrum auction and other charges levied by the Department of Telecom.

The estimated receipts from communication services in the Budget proposals presented by Finance Minister Arun Jaitley today are lower than the revised estimates for the current fiscal at Rs 43,161.72 crore.

The government has earlier estimated revenue of Rs 45,471.02 crore in 2014-15.

“Receipts under other communications services mainly relate to one-time spectrum charges levied as per recommendations of TRAI, auction of 1,800 Mhz (megahertz) and 900 Mhz spectrum and receipts from 800 Mhz spectrum,” the Budget document said.

The Department of Telecom (DoT) collects recurring licence fees from various telecom operators and also collects one time entry fee from new operators, the document said.

The DoT is scheduled to start spectrum auction for four bands from March 4.

Based on the reserve price, the government estimated to garner over Rs 82,000 crore from the sale of radiowaves for providing 2G and 3G services in the upcoming auction.

The government plans to sell 380.75 MHz of spectrum in the three bands — the premium 900 MHz band, 1800 MHz and 800 MHz, besides 5 Mhz in the 2100 Mhz band across 17 out of 22 telecom areas.

The government had raked in Rs 62,162 crore from the last spectrum auction in February 2014.

Govt to soon notify norms for liberalised ADR/GDR regime

New Delhi: To make raising funds overseas easier by Indian companies, the government will soon notify a liberalised ADR/GDR regime and necessary amendments will be made by financial sector regulators – RBI and Sebi in this regard.

The revised norms would allow issuance of depository receipts on all permissible securities.

The liberalised ADR (American Depository Receipt)/GDR (Global Depository Receipt) norms were proposed by the Finance Minister Arun Jaitley during the last budget in July.

Giving an update on the proposal, the Budget said, “…revised ADR/GDR scheme has been accepted and will be notified shortly after the enabling amendments are made by RBI (Reserve Bank of India) and Sebi (Securities and Exchange Board of India.”

With regard to international settlement of Indian debt securities, the document said: “Deliberations are going on with the RBI and Sebi to finalise and implement Euroclearability of Indian Debt Securities.”

Under the revised ADR/GDR regime, domestic companies will be allowed to issue depository receipts — an instrument to raise funds from overseas — on all kinds of securities such as debt, equity and mutual fund units.

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