Tim Cook and his team received a major push for Apple’s expansion plans in India when the Karnataka government allowed them to set up an iPhone manufacturing unit on our shores. Hardly a week later, it looks like Apple might be in for some bad surprises.
As part of their recent negotiations with the Indian government, Apple had requested a “15-year exemption on countervailing duty”, a.k.a. CVD.
Essentially, Apple was asking for an exemption from paying taxes on imported parts/technologies that would be required for manufacturing their goods here in India.
The request couldn’t have come at a worse time for Apple.
India is just about to roll out the new GST. Under the new rules, Apple will have to pay a hefty fee as import duty on anything they want to bring here. Apple’s expansion plans in India rest on the hope that India will waive off this tax for them so that they can grow rapidly in the country.
However, the Indian government doesn’t seem too keen on granting Apple the free pass.
Revenue Secretary, Hasmukh Adhia, explained in a statement to the Economic Times ‑
“There is no way we can give individual exemptions under GST regime. All of them [the existing exemptions] will go [with the new GST]. We have been unfair to the local industry. I don’t know their exact demands, but we have limitations on giving exemptions under the new GST.”
As expected, both the government and Apple will be indulging in further talks on the issue. There are a lot of aspects that need a final clarification from the government that will lay the path of Apple’s expansion plans in India.
As for the matter of exemptions from CVD, the final decision will be in the hands of the GST Council.
Right now, it’s not possible to say if they will vote in favour or against Apple. Tim Cook will want to get a green light on the issue as early as possible so that he can push forward Apple’s expansion plans in India.
Source: Economic Times
