Electronics companies seek 2-4% rate on key exports

New Delhi: The electronics industry has proposed an incentive rate of 2-4% on export of products from key categories, including mobile phones, laptops, tablets, chargers and batteries, under the newly launched remission of duties or taxes on export products (RoDTEP) scheme.

The India Cellular and Electronics Association (ICEA) has proposed a RoDTEP rate of 2% on smartphones, 2.4% on feature phones, 2% on tablets and laptops, 3.4% on battery chargers and 1.48% on battery packs.

“RoDTEP is critical to address India’s deep disabilities vis-à-vis its competitors for boosting electronics manufacturing and making it India’s number 1 export by 2025,” said Pankaj Mohindroo, chairman, ICEA. ICEA represents several phone brands, including Apple, Xiaomi, Motorola, Nokia, Lava, Vivo, Motorola, Oppo, Realme and Micromax, besides contract manufacturers Foxconn, Wistron, Flextronics and Dixon.

“This needs to be an ongoing exercise to address the adverse impact on India’s competitiveness, of high taxes which remain unremitted. Early finalisation of RoDTEP base rate and rates of priority products needs to be our immediate focus,” he said.

RoDTEP is a WTO consistent scheme which aims to reimburse exporters’ central and state taxes/duties/levies on electricity, fuel, transport, stamp duty, excise duty, power and other costs. The government is yet to notify RoDTEP rates, being calculated by a three-member committee set up in July 2020 under former home and commerce secretary GK Pillai.

ICEA estimates that its proposed RoDTEP rates will 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.

According to ICEA’s Mohindroo, 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 with countries like China and Taiwan, he said.

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