Need to rework capping of RoDTEP rates on mobile phones, PCBAs: Handset makers

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Need to rework capping of RoDTEP rates on mobile phones, PCBAs: Handset makers



Handset makers have said that there is a need to rework the capping of the Remission of Duties and Taxes on Export Products (RoDTEP) rates on mobile phones and PCBAs.

Centre has today notified RoDTEP Scheme Guidelines and Rates (Remission of Duties and Taxes on Exported Products). The rate has been capped to Rs 24.5 per unit for smartphones and Rs 2.30 for PCBAs.

"The capping of the RoDTEP rates on mobile phones and PCBAs needs to be reworked. The condition of non-availability of RoDTEP for SEZs', EOUs', Advance Authorization Bond under Section 65 etc., is also not logical since these dispensations also suffer the unabsorbed indirect taxation on fuel, electricity etc," Pankaj Mohindroo, Chairman, ICEA told ET.

The India Cellular and Electronics Association (ICEA) had previously proposed a RoDTEP rate of 2% on smartphones, 2.4% on feature phones, 2% on tablets/laptops, 3.4% on battery chargers and 1.48% on battery packs.
ICEA represents phone brands including Apple, Xiaomi, Motorola, Nokia, Lava, Vivo, Motorola, Oppo, Realme, Micromax and others besides contract manufacturers Foxconn, Wistron, Flextronics and Dixon.

The Merchandise Exports Incentive Scheme (MEIS), which offered 2-4% of free-on-board export value as duty credit scrips to handset and component exporters, expired on December 31.

RoDTEP, which replaced the erstwhile Merchandise Exports Incentive Scheme (MEIS) from January 1, 2021, is a WTO-consistent scheme which aims to reimburse the exporters Central and State taxes/duties/levies on electricity, fuel, transport, stamp duty, excise duty, power and other costs.

Mohindroo, however, said that the body is satisfied with the RoDTEP rates on laptops, tablets, desktops, keyboards, earphones, speakers and batteries with the current level of domestic value addition.

ICEA previously estimated that its proposed RoDTEP rates would deliver an annual incentive of close to Rs 120 crore, based on remission of big ticket items such as indirect taxes on transport and power, and embedded taxes on inputs.

RoDTEP in itself is not a stronger scheme than MEIS, which pushed up electronics exports by 85% in 2017. But, coupled with the production-linked incentive, RoDTEP can offset major disabilities in manufacturing compared to countries like China and Taiwan, he previously told ET.

Source: https://telecom.economictimes.indiatimes.com/news/need-to-rework-capping-of-rodtep-rates-on-mobile-phones-pcbas-handset-makers/85400273