Lok Sabha Question No. 1306 (UNSTARRED), answered on 2019-02-11
Subject: Manufacturing of Mobile Handsets
Ministry: COMMERCE AND INDUSTRY
Asked by: RAM KUMAR SHARMA KUSHWAHA

## GOVERNMENT OF INDIA MINISTRY OF COMMERCE & INDUSTRY DEPARTMENT FOR PROMOTION OF INDUSTRY AND INTERNAL TRADE

## LOK SABHA

UNSTARRED QUESTION NO. 1306.

TO BE ANSWERED ON MONDAY, THE 11 TH   FEBRUARY, 2019.

## MANUFACTURING OF MOBILE HANDSETS

## 1306.  SHRI RAM KUMAR SHARMA:

Will the Minister of COMMERCE AND INDUSTRY be pleased to state:

## वाणिज्य एवं उद्योग मंत्री

- (a) whether many industrial houses are in the business of manufacturing mobile handsets in the country;
- (b) if  so,  the  number  of  such  companies  engaged  in  this  business  as  on December 2018 and the number of such manufacturing units amongst them functioning in special Economic Zones;
- (c) whether  these  companies  are  getting  tax  rebates  from  the  Government  as they are functioning in Special Economic Zones; and
- (d) if  so,  the  details  of  the  benefits  provided  to  these  companies  by  the
- Government?

## ANSWER

## वाणिज् य एवं उद्योग मंत्रालय में राज् यमंत्री (श्री सी.आर. चौधरी) THE MINISTER OF STATE IN THE MINISTRY OF COMMERCE & INDUSTRY (SHRI C.R. CHAUDHARY)

- (a) & (b): Yes, Madam.  As  per  information received from the Ministry of Electronics  and  Information  Technology,    presently,  127  units  are manufacturing  mobile  handsets  in  the  country  and  all  of  them  are operating  from  the  Domestic  Tariff  Area  (DTA).    Further,  as  per information  received  from    the  Department  of  Commerce,  two  units namely  M/s  Flextronics  Technologies  (I)  Pvt.  Ltd.  and  M/s  Pertech Exports Pvt. Ltd. have been granted letter of approval for manufacture
- of mobile handsets in SEZs.
- (c) & (d): As  per  information  received  from  the  Ministry  of  Electronics  and Information Technology, the mobile handset manufacturing operations in  DTA  are  governed  by  the  applicable  duty  structure.  The  benefits available to manufacturer of mobile handsets, inter-alia, include rationalized  tariff  structure  and  a  Phased  Manufacturing  Programme (PMP) and their sub-assemblies/ parts; availing Capex benefits under the Modified Special Incentive Package Scheme (M-SIPS); 100% FDI

permitted for manufacture of mobile handsets and their subassemblies/ parts; export incentive of 4% of FoB value of export under the  Merchandise  Export  from  India  Scheme  (MEIS);  and  specified capital  goods  for  manufacture  of  mobile  handsets  are  permitted  for import at 'Nil' Basic Customs Duty (BCD).

Further,  the  Department  of  Commerce  has  informed  that  benefits available to the units under SEZ Act, 2005 & SEZ Rules,  2006 interalia,  includes  duty  free  import/domestic  procurement  of  goods  for development, operation and maintenance of SEZ units; 100% Income Tax exemption on export income for SEZ units under Section 10AA of the  Income Tax Act for first 5 years, 50% for next 5 years thereafter and 50% of the ploughed back export profit for next 5 years; exemption from  Central  Sales  Tax,  exemption  from  Service  Tax  and  exemption from  State  sales  tax  (These  have  now  subsumed  into  GST  and supplies to SEZs are zero rated under IGST Act, 2017); and exemption from other levies as imposed by the respective State Governments.

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