GST to speed-break Apple’s Make in India plans

Department of Industrial Policy

The rollout of the goods and services tax (GST) in the financial year 2017-18 could make it difficult for the government to provide the concessions sought by iPhone-maker Apple Inc for manufacturing its flagship devices in the country.

Revenue Secretary Hasmukh Adhia ahs mentioned that giving individual exemptions under the GST regime was not possible. So, Adhia explained, all countervailing duty (CVD) exemptions would go.

The Cupertino, US-headquartered company continues to engage in talks with the central government over full-scale manufacturing of its flagship devices in the country. For this, Apple is seeking a 15-year CVD exemption from the government to make India a hub for exporting the devices rather than just producing devices for the local market, according to officials at the commerce ministry. Apple is facing a challenge of rising input costs in China, apart from the Chinese government increasingly cracking down on foreign companies.

Adhia said that Make in India would get a boost under the GST regime, and local industry, which had been competing on “unfair” terms, would get a fillip. While Adhia acknowledged that he was not aware of the exact nature of Apple’s demand, citing that it was the Department of Industrial Policy and Promotion which was dealing with technology giant, he clarified that the government faced limitations when it came to giving exemptions under GST.

While the talks continue, Apple is gearing up to produce the lower-cost iPhone SE at its upcoming facility in Bengaluru. The plant in Bengaluru, owned by Apple partner Wistron, is already being upgraded to support the assembly operations.

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