The basic custom duty of 20% is instead causing an annual loss of Rs 2,500 crore to the exchequer due to rampant smuggling of these devices that is also destabilising the business of Indian retailers who stock these phones, an association of manufacturers said in a letter to the Department for Promotion of Industry and Internal Trade.
The factory is expected to generate employment for close to 10,000 people, besides a $2-bn export boost.
The telcos have sought a limited review of the October 24 ruling, and haven’t challenged the entire SC order.
As proposed by Committee of Secretaries, GST Council to take final call. Input tax credit worth some Rs 18,000 crore for Reliance Jio, about Rs 10,000 crore for Bharti Airtel and roughly Rs 8,000 crore for Vodafone Idea are currently stuck with the finance ministry.
Referring to the inclusion of components such as trade discounts, discounts on prepaid tariffs and forex fluctuations in the computation of AGR, Salve in his legal opinion said that in the past, the telecom tribunal headed by a retired judge had held that the demands of the government were “illegal”.
The letter was written after govt officials expressed displeasure over the tone and tenor of Read’s comments.
The industry as a whole faces dues worth over Rs 1.3 lakh crore in licensee fee, spectrum usage charge (SUC), penalties and interest, after SC backed the government’s stance that non-core items should be included while calculating AGR. Licensee fee and SUC are calculated on the basis of AGR.
A panel would look at the issue of AGR dues after telcos approached the Supreme Court for relief.
DoT estimated that increase of 10% in realisations from subscribers may yield Rs 35k cr in revenue for telcos.
The proposed shift out of China by Flex, one of the world’s largest exporter of electronics goods, comes amid the continuing Sino-US trade war. It coincides with India’s efforts to attract global manufacturers that may be looking to move out of what is popularly called the ‘world’s factory.’
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