Phone makers’ body calls for clarity on manufacturing policy

Days after Telangana notified a mobile manufacturing policy, listing incentives and the conditions for availing them, the Indian Cellular Association has expressed apprehension that lack of clarity on tax-related sops could lead to harassment of companies.

While thanking Chief Minister K. Chandrasekhar Rao, IT Minister K.T. Rama Rao and other officials, the Association highlighted the need for such policies to be explicit.

There should be little room for misinterpretation by ground-level revenue and industry department staff.

One of the measures it wants the State government to take is to list items on which the 5 per cent VAT rate will apply.

The time frame when this would be in vogue is also a clarity it has sought.

A body comprising mobile phone manufacturers, big and small, domestic and international brands, the ICA has also raised levy of CST. While the policy says the government will “waive off CST at 2 per cent,” the Association has underscored the need to exempt mobile phones, tablets, their components and accessories from CST (although a similar nomenclature may be appearing in the VAT schedule).

The Association is concerned that the absence of clarity could result in field-level staff of the departments concerned, “arm twisting the industry”.

The minimum level of employment generation laid down to avail the incentives is one more issue raised by the ICA. The number of jobs created by parts, components and accessories-makers depending on their operations, is a point it wants to drive home.

Confirming that the Association has written to the government on the policy, president Pankaj Mohindroo said clarity is essential, particularly if Telangana wants to become a hub for mobile phone manufacturing.