By:Mohan Lal Verma
In wake of levying additional VAT on mobile charger the Indian Cellular Association has urged state Government to follow the best international practices.
In a letter addressed to the Chief Minister Mr. Virbhadra Singh, ICA’s National President Mr Pankaj Mohindroo has drawn attention to the unwarranted and detrimental attempt by state’s tax department to treat mobile charger as an independent accessory for the purpose of taxation simply to extract higher taxes from the Industry.
He said this move is against well-established taxation practice internationally that mobile chargers are not taxed separately though they are always accompanied with mobile phones.
ICA is of this view that such arbitrary actions on part of taxation department could dampen the efforts to create a robust ESDM (Electronics System Design & Manufacturing) eco-system in the country.
“World over, essential accessories which come as a composite part of mobile handset pack are treated as one unit and taxed at the same rate as mobile handsets. This is the standard international trade practice and we must follow this too if we want to be internationally competitive. Governments world over do not tax essential accessories differently if they come as one composite pack. It can’t be that if one buys a car, one will be subjected to different taxes for the body, engine and the tyres” as said by Mr Mohindroo.
He also that when India is trying to build a robust mobile handset manufacturing eco-system as a part of their Make in India initiative, attempts by overzealous tax department to subject manufacturers to higher taxes by way of perverse interpretations of rules & goods classifications, has come as a dampener to companies wanting to set up greenfield manufacturing units or scale up the existing operations.
