The mobile handset manufacturing industry seeks alteration in the GST rates applicable to the Internal Parts and Accessories of mobile phones. A lower GST percentage i.e. 12% is sought by the manufacturing arena on mobile parts and accessories making it go hand in hand with the GST rates on the finished product.
According to the Phased Manufacturing Programme (PMP), 12% GST is proposed for a complete list of Mobile Parts and Accessories against the current 18 – 28 percent.
Mentioned by the India Cellular and Electronics Association (ICEA) in its Budget 2020 Wishlist, GST rates applicable to the manufacturing of inputs, components, and accessories of mobile handsets should not exceed the GST (Good and Services Tax) rate of the final product (i.e. 12%). Hence the situation calls for dropping the GST rates on mobile inputs & accessories 
ICEA further conveys that the current rate is either 18% or 28% on the mobile parts making the scenario even worst as 10% tax is levied under BCD (basic customs duty) on Printed Circuit Board Assembly (PCBA) of mobile phones as per PMP. PCBA is a crucial element in a mobile phone.
20% BCD on mobile phones shall continue but with a difference. The maximum BCD limit should be Rs. 4,000. The revenue growth is estimated to increase by RS. 1,000 Cr. even the economy will be benefitted and there will be an acute check on smuggling, says ICEA.
Above this, the unfavorable verdict on export incentives by WTO might destroy our expectations of export growth in mobile phones which were estimated to reach $4 billion this year, said ICEA chairman Pankaj Mahindroo.
Read Also: GST Impact on Mobile Phone Manufacturers 
“We have made progress in both smartphones and component segments. As an export strategy It is critical that till such time the MEIS is replaced with a WTO-compliant scheme or a combination of schemes, the existing 4 percent MEIS must continue and suitable budget provisions must be made,” he said.
The expiry of MEIS was estimated for 31 Dec 2019 since the government didn’t land on any conclusions regarding the closure, the benefits under MEIS is still granted to supporters and are supposed to extend till 31 March 2020. When the new Foreign Trade Policy will commence (2020 – 2025). The regulatory department is all set to invest RS. 1 Crore for the establishment of champion companies.
It highly recommended that the Budget Head should be included in the Union Budget stating the allotment of Rs. 1,000 Cr. for the establishment of Champion Companies in India, said ICEA chairman.
Paying heed to the increasing BCD on mobile parts and accessories, All Industry Rates (AIR) of Duty Drawback must increase by 7% with the cap of min Rs. 700, said ICEA.
