In a bid to promote Make in India, the government has made it clear that it will not be able to extend tax and duty-related concessions to iPhone maker Apple under the new indirect tax regime, the Economic Times reported.
“We have already hiked customs duty on the smartphone and imports of its parts. So, it is clear that we do not want to encourage imports and rather encourage Make in India. With the Goods and Services Tax (GST) in place, giving separate exemptions to anyone is not possible,” said an official source from the government.
iPhone production in India was set to switch to top gear after getting a green signal from the government and the GST rollout on July 1.
Last year, Apple had sought concessions and exemptions, which remain pending till date, from the government to manufacture Apple products in the country. It was also reported that iPhone maker Apple may discontinue its first phase of manufacturing, which is in process in Bengaluru, if the government fail to offer a viable financial proposition to the company.
The company had started production of the iPhone in Bengaluru in June, where it has also set up a large app-accelerator announced last year that has trained thousands of iOS developers – this information was also shared with Prime Minister Narendra Modi during his visit to the US.
The Cupertino-based smartphone maker has slashed retail prices of all its iPhone models by 4 per cent to 7.5 per cent from July 1, as it passed on benefits accrued from the GST regime to consumers.
Meanwhile, the government also asked for details on the scale of the proposed investment in the second phase for the manufacture of Apple iPhones in India – the proposed capacity and likely employment to be generated.
Earlier, Apple had proposed to the government that it is ready to kick off manufacturing operations but wants some tweak in fiscal concessions. Besides exemption from customs duty on imports of components and equipment for 15 years, Apple has sought relaxation in the mandated 30 per cent local sourcing of components.
Apple’s production in India is expected to swing into high gear once clarity emerges after the GST rollout on July 1. Apple sells its products through company-owned retail stores in countries like China, Germany, the US, the UK and France, among others. It has no wholly-owned store in India and sells its products through distributors such as Redington and Ingram Micro.