The electronics industry has come up with an incentive rate of 2-4 percent on the export of products from key categories, under the newly launched remission of duties or taxes on export products (RoDTEP) scheme. These include products such as mobile phones, laptops, chargers, and batteries.
The India Cellular and Electronics Association (ICEA) has suggested a RoDTEP rate of 2 per cent on smartphones, 2.4 per cent on feature phones, 2 per cent on tablets and laptops, 3.4 per cent on battery chargers, and 1.48 per cent 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 (India Cellular and Electronics Association) represents several phone brands. Besides contract manufacturers Foxconn, Wistron, Flextronics, and Dixon, the phone brands also include Apple, Xiaomi, Motorola, Nokia, Lava, Vivo, Motorola, Oppo, Realme, and Micromax.
“This needs to be an ongoing exercise to address the adverse impact on India’s competitiveness, of high taxes which remain unremitted. Early finalization of RoDTEP base rate and rates of priority products needs to be our immediate focus,” he said.
RoDTEP (Remission of Duties and Taxes on Exported Products) is a WTO (World Trade Organization) consistent scheme that not only aims to reimburse exporters’ central taxes/duties/levies on electricity, fuel, transport, stamp duty, excise duty, power, and other costs but also the state taxes/duties/levies on electricity, fuel, transport, stamp duty, excise duty, power, and other costs. Being calculated by a three-member committee set up in July, last year under former home and commerce secretary GK Pillai, the government is yet to notify RoDTEP rates.
India Cellular and Electronics Association estimates that its proposed RoDTEP (Remission of Duties and Taxes on Exported Products) rates will deliver an annual incentive of close to Rs 120 crore. This will be based on remission of big-ticket items, which includes indirect taxes on transport and power, and embedded taxes on inputs.
According to ICEA’s Monindroo, “RoDTEP in itself is not a stronger scheme than MEIS, which pushed up electronics exports by 85 percent 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.