Govt exploring ways to accommodate Apple's tax concession demands

The Dollar Business Bureau

The government is exploring ways to accommodate iPhone maker Apple’s demands on tax and duty concession for setting up its manufacturing plant in India.

Apple has been seeking concessions from the government as it plans to bring its supply chain in the country since it cannot source these inputs locally. The Cupertino-based company also seeks duty exemptions on the products that it procures from special economic zones (SEZs). Currently, goods shipped from SEZs do not attract any duty, but if goods manufactured in SEZs are sold in the domestic market then it attracts import duties on these products.

However, since the government has been aiming to make India a manufacturing hub for smartphones, it may not extend duty concessions to Apple. The government is also keen on building a strong supply chain in the domestic market without offering any concessions to smartphone players. No domestic or foreign manufacturer has asked the government to provide any duty concession.

Earlier, the Finance Ministry had rejected the demands of the technology major. Apple’s senior executives then met an inter-ministerial group in the country to deliberate upon the issue. They discussed with the government the company’s long-sought demands. The government then assured it will make ways to extend certain support measures to the global technology leader.

Apple has also urged the Indian government to provide relaxations for consumables for the manufacturing of smartphone and service or repair for 15 years.

In January this year, Apple indicated that was ready to start manufacturing iPhones in India, but needed fiscal concessions, such as customs duty waiver on import of components.

Currently, Apple sells its products through Apple-owned retail stores across various countries including China, France, Germany, the UK and the US, among others. It does not have any wholly-owned store in India. It sells its products through distributors such as Redington and Ingram Micro.