India Mulls Tax Holiday for Local Telecoms Manufacturers

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Published on: 15th Feb 2016 by Cellular-News
India's Telecoms Ministry is seeking a 10 year tax holiday from the government in its forthcoming Union Budget, which would be aimed at attracting fresh investors to the country.
The proposals from the Ministry also include an excise duty exemption to help boost local manufacturing of telecoms equipment.
The 10-year tax holiday is estimated to encourage investments of around US$1 billion over the next three years.
"Such proposals would be exempt from MAT (minimum alternate tax) as well for the same time frame," an official told the Economic Times newspaper. Extending the differential excise duty that's levied on mobile phones to electronic equipment such as network switches, routers and modems has also been proposed, the official added.
The government has been pushing hard to encourage local manufacturing of mobile phones, and last year imposed an 11 percent levy on handsets imported into the country. Since then, a number of new factories have been set up within the country, and local production has soared.
The tax holiday is likely to apply to a number of handset components which may help reduce those imports and further boost local production.
The unknown issue is how other governments, faced with local unemployment as factories shift to India will react, and if a tax-war will break out between countries seeking to preserve their own manufacturing hubs. Source :  Cellular News
The Nigeria NCC may have to borrow from this aggressive move by India.

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