New Delhi: India's smartphone industry is set to contribute more than ₹65,000 crore in goods and services tax (GST) in the ongoing fiscal, the industry has told the finance ministry. This would immediately follow an outsized ₹2.45 lakh crore in GST payments, including more than ₹81,000 crore of incremental tax after a hike in rates, during the smartphone production linked incentive (PLI) period from FY21 to FY25.
"The projected GST contribution for the five-year PLI period FY21-FY26 is expected to cross ₹3 lakh crore at the end of FY26," India Cellular and Electronics Association (ICEA) said in a letter dated October 8 to finance minister Nirmala Sitharaman.
ET has seen a copy of the letter.
Due to the impact of the PLI scheme, smartphone production has more than doubled to ₹5.45 lakh crore in FY25 from ₹2.1 lakh crore in FY20. Exports have increased to over ₹2 lakh crore in the reported period, from a mere ₹27,225 crore.
At the start of the smartphone PLI scheme in April 2020, GST on mobile phones was increased to 18% from 12%. During the FY21-FY25 period of the scheme, the industry has contributed over an estimated ₹2.45 lakh crore of GST, of which around ₹81,800 crore is an incremental GST contribution. "This underscores the tremendous success of the government's PLI scheme and the positive impact on revenue collection," ICEA, which counts companies like Apple, Oppo, Dixon, Lava, Vivo, Foxconn, Micromax etc, said in the letter.
The industry had pushed for smartphones to be included in the range of products on which GST was cut recently. But the GST on smartphones has not changed and remains at 18%.
The domestic market for mobile phones has expanded from ₹2.14 lakh crore in FY21 to ₹3.40 lakh crore in FY25 and the GST revenues rose from estimated ₹38,475 crore from FY21 to an estimated ₹61,200 crore per year by FY25, marking an overall increase of 158%. "The GST collections show the electronics sector is now adding real value to the economy. It is not only generating revenue for the exchequer but also helped India become the world's second largest manufacturer and third-largest exporter of mobile phones," the industry highlighted.
This fiscal year, for the first six months, smartphone exports have already crossed ₹1.17 lakh crore, which is an all-time record.
The PLI scheme was announced for a period of six years where companies were allowed to pick any five consecutive years for availing financial incentives. While Samsung picked the first five years, iPhone manufacturers Foxconn, Tata Electronics (earlier Wistron) and Tata Pegatron along with Indian companies like Dixon and Micromax etc, picked FY21-26 as the five-year period. The current PLI scheme ends in March next year.
"The projected GST contribution for the five-year PLI period FY21-FY26 is expected to cross ₹3 lakh crore at the end of FY26," India Cellular and Electronics Association (ICEA) said in a letter dated October 8 to finance minister Nirmala Sitharaman.
ET has seen a copy of the letter.
Due to the impact of the PLI scheme, smartphone production has more than doubled to ₹5.45 lakh crore in FY25 from ₹2.1 lakh crore in FY20. Exports have increased to over ₹2 lakh crore in the reported period, from a mere ₹27,225 crore.
At the start of the smartphone PLI scheme in April 2020, GST on mobile phones was increased to 18% from 12%. During the FY21-FY25 period of the scheme, the industry has contributed over an estimated ₹2.45 lakh crore of GST, of which around ₹81,800 crore is an incremental GST contribution. "This underscores the tremendous success of the government's PLI scheme and the positive impact on revenue collection," ICEA, which counts companies like Apple, Oppo, Dixon, Lava, Vivo, Foxconn, Micromax etc, said in the letter.
The industry had pushed for smartphones to be included in the range of products on which GST was cut recently. But the GST on smartphones has not changed and remains at 18%.
The domestic market for mobile phones has expanded from ₹2.14 lakh crore in FY21 to ₹3.40 lakh crore in FY25 and the GST revenues rose from estimated ₹38,475 crore from FY21 to an estimated ₹61,200 crore per year by FY25, marking an overall increase of 158%. "The GST collections show the electronics sector is now adding real value to the economy. It is not only generating revenue for the exchequer but also helped India become the world's second largest manufacturer and third-largest exporter of mobile phones," the industry highlighted.
This fiscal year, for the first six months, smartphone exports have already crossed ₹1.17 lakh crore, which is an all-time record.
The PLI scheme was announced for a period of six years where companies were allowed to pick any five consecutive years for availing financial incentives. While Samsung picked the first five years, iPhone manufacturers Foxconn, Tata Electronics (earlier Wistron) and Tata Pegatron along with Indian companies like Dixon and Micromax etc, picked FY21-26 as the five-year period. The current PLI scheme ends in March next year.
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