On Wednesday, Nirmala Sitharaman, the minister of finance, announced a reduction in the customs duty in India on the import of specific components used in the production of mobile phones.
The customs duty on the import of certain inputs for mobile phone manufacturing varies depending on the country and the specific inputs being imported.
In general, customs duties are taxes imposed on imported goods by the government of the importing country.
These duties are typically based on the value of the goods and their classification under the Harmonized System (HS) codes. The rate of duty can range from zero to several hundred percent, depending on the type of goods and the country.
To determine the specific customs duty applicable to a particular product, it is best to consult the relevant government agency or a customs agent.
The mobile output represents a significant increase in the country’s mobile phone production.
The growth of the mobile phone industry in India has been driven by a combination of factors, including the availability of skilled labor, favorable government policies, and the growing demand for smartphones among consumers.
Additionally, the Indian government has implemented various initiatives aimed at boosting the growth of the electronics and mobile phone manufacturing industries, including tax incentives and infrastructure development.
The rise in mobile phone production in India has also had a positive impact on the country’s economy, creating employment opportunities and contributing to the growth of related industries such as component manufacturing and software development.
But her announcement comes as international players search for a China Plus One strategy and India has aggressively positioned itself as a global electronics powerhouse.
Thanks to the Center’s enabling policies, numerous incentive programs, and determination to create a competitive environment for the industry, India has become the second-largest mobile phone manufacturer in the world.
Additionally, Sitharaman stated that the customs duty on some open cells in TV panels would be reduced to 2.5%, while the duty on the kitchen electric chimney has been raised to 15% from 7.5%.
She did, however, assert that the government would maintain the 2.5% basic concessionary customs duty on copper scrap.
The basic customs duty on goods made from gold bars will increase, and the finance minister also announced a 16% increase in the tax on cigarettes.
She added that to encourage exports, the government would also lower the customs duty on shrimp feed.
Customs duty on shrimp feed can be reduced or waived by the government of a country to promote exports of shrimp and seafood products.
The purpose of this measure is to make shrimp farming more cost-competitive and to encourage the growth of the seafood industry.
By reducing the cost of inputs such as shrimp feed, the government aims to increase the profitability of shrimp farming, which can lead to increased production and exports.
The reduction or elimination of customs duties on shrimp feed can also make the country more attractive to foreign investors looking to invest in the seafood industry.
However, such measures should be implemented carefully, as they can also have negative consequences, such as increased imports of feed and decreased domestic production of feed, which can negatively impact local feed producers.
Later, she added that the government plans to raise the presumptive taxation thresholds for MSMEs and specific professionals to Rs 3 crore and Rs 75 lakh, respectively.
MSME stands for Micro, Small, and Medium Enterprises. Presumptive taxation is a simplified taxation system for small businesses and professionals who find it difficult to maintain proper books of accounts or are not required to get their accounts audited.
The presumptive taxation threshold for MSMEs refers to the turnover limit beyond which businesses are no longer eligible for the presumptive taxation scheme and are required to maintain regular books of accounts and get their accounts audited.
The threshold varies between countries and can be subject to change.
In India, for example, the presumptive taxation scheme is available to businesses with a turnover of up to INR 2 crores (approximately USD 280,000) and individuals with a professional income of up to INR 50 lakhs (approximately USD 70,000).
Businesses or individuals with a higher turnover or income are not eligible for presumptive taxation and are required to maintain regular books of accounts and get their accounts audited.
It is important for MSMEs to be aware of the presumptive taxation thresholds in their country and to ensure that they are in compliance with the tax laws and regulations applicable to their business.
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