With Taiwanese electronics contract manufacturing major Foxconn keen to set shop in the country, the Central Board of Excise and Customs and the IT department have started looking at the the current mobile phone manufacturing and SKD component with a fine-tooth comb, reports Gireesh Chandra Prasad in New Delhi.
The idea is to check if genuine SKD components are coming in and then being assembled or whether mobiles are simply dis-assembled in China and brought into India in SKD format to avail of the differential duty. If it is the latter, manufacturers like Foxconn would never be able to succeed in India. Hence, the CBEC wants to penalise such SKD imports.
The move follows finance minister Arun Jaitley’s initiative in the Budget where he brought in a 1% excise duty for mobiles made in the country while hiking the countervailing duty to 12.5% — or a 11.5% difference between locally produced ones and imported ones.
Mobile makers are also alarmed and, say CBEC sources, have sought a clarification on what constitutes domestic manufacturing and assembly and superfluous SKD.