Apple’s manufacturing tax demand to be considered after GST roll out: Report

Apple's demand for tax incentives to set up manufacturing plant in India be looked at after the Goods and Services Tax (GST) is rolled out.

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Highlights

    • Apple Inc.’s tax demand to be looked at after GST roll out.
    • The company has sought  relaxation on 30% local sourcing of components.
    • The iPhone maker is planning to set up manufacturing unit in India.

While the Chinese conglomerate Xiaomi is already setting up its second factory in India and accruing a major share in the smartphone market, Apple is still struggling to fulfill its manufacturing demands in the country. The US-based tech major’s tax incentive demand was recently denied by the Revenue Department.

Now a new report has outlined that Apple Inc.’s demand for tax incentives will be encouraged after the Good and Services Tax (GST) is rolled out. According to the report from PTI, Commerce and Industry minister, Nirmala Sitharam told the publication, “GST will be coming soon. So, tax-related incentives demanded by Apple will have to be looked from a different angle.” The government has not accepted most of the demands of the iPhone maker, she further said.

The Cupertino tech giant’s demand on tax concession has been intermittently put on the bars of denial by the Government of India. Apple Inc., on December 2016 sought for being permanently exempted from the 30 percent local sourcing rules based on the ground that it was bringing “the state-of-art” and “cutting-edge-technology” products for which local sourcing is impossible.

The government, recently, relaxed the labelling laws for the company – however, the relaxation is meant only for three years from the commencement of business ‘for single brand retail trades’. Besides this, Apple’s request on importing and selling refurbished iPhone in India was rejected early in February this year. Moreover, Apple had also demanded custom duty exemption on import of components. The company placed a request for tax concessions in import and manufacturing import duties to open stores in India but that got rejected as well.

The US-iPhone maker is planning to set up a manufacturing plant in Bengaluru this year. The company is said to assemble its products most likely the iPhone 6 and iPhone 6s units, as reports have cited. Apple Inc., back in January this year briefed a detail presentation to the ministry officials wherein the company had indicated that it is ready with a blueprint to begin manufacturing process of iPhone units in India.