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Smartphone Display Assembly With Parts Fitted to Attract 15 Percent Import Duty, CBIC Says

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By Press Trust of India | Updated: 20 August 2022 02:00 IST

Import of mobile phone display assembly, which are fitted with items like speakers, SIM tray and power key, will attract a 15 percent basic customs duty (BCD), the Central Board of Indirect Taxes and Customs (CBIC) has said. The CBIC said there have been instances of mis-declaration while importing display assembly of cellular mobile phones. Currently, display assembly of mobile phones attracts 10 percent customs duty, and nil duty on imports of inputs or parts separately for use for manufacturing of a display assembly.

The display assembly of a cellular mobile phone consists of touch panel, cover glass, LED backlight, FPC (flexible printer circuit) specifically needed for rendering display functions and brightness enhancement film.

In a circular to field offices, the CBIC said if a display assembly of mobile phone is imported with merely a back support frame of metal or plastic attached to it, it will attract 10 percent BCD.

However, the back support frame of metal/plastic, if imported individually, will attract a BCD of 15 percent.

“If any other item like the SIM tray, antenna pin, speaker net, power key, slider switch, battery compartment, Flexible Printed Circuits (FPCs) for volume, power, sensors, speakers, finger print etc, come fitted along with a display assembly with or without a back support frame of metal/plastic, then the whole assembly attracts a BCD rate of 15 percent,” the CBIC said.

Such assembly, consisting of display assembly and any other parts, is not eligible for the benefit of concessional rate of 10 percent BCD, the CBIC clarified.

EY India Tax Partner Saurabh Agarwal said this clarification brings in the certainty of taxation to the mobile phone manufacturers for future imports who have been at loggerheads with customs officials since long for determining appropriate BCD rate of display assembly modules.

“What needs to be assessed is how would this unfold in the courts and impact the existing litigations as the additional BCD cost (if any) on past imports would not be recoverable from customers but would have to be borne by the manufacturer importers only”, Agarwal added.

Abhishek Jain, Partner Indirect Tax at KPMG in India, said: “Ensuring that the Customs classification is done appropriately and there is no duty evasion is key for the successful implementation of the PMP and the Make In India programme. At the same time, it is important to ensure that tedious investigations don’t affect business operations.

“This circular should provide ample clarity regarding the classification of display assembly, which has been an issue in the past for the electronics industry. The circular clearly lays down along with diagrammatic presentation as to upto what extent will the integration be considered at display assembly, and beyond what point will it be considered as parts of cellular devices.” Mobile devices industry body India Cellular & Electronics Association (ICEA) said that the circular will give a positive message to all investors – Indian and global.

The government had notified a Phased Manufacturing Programme (PMP) in 2016 for mobile phone manufacturing to create the manufacturing capabilities and increase domestic value addition in the country.

As per the PMP, BCD on display assembly was imposed on October 1, 2020 and parts of display assembly remained exempted.

ICEA said that the Ministry of Electronics and IT (Meity) has also submitted a document to the Department of Revenue that detailed the prominent constituents of Display assembly on which BCD will be exempted.

“However, field formations arrived at an interpretation which was at variance from the document and began investigations against most manufacturers. ICEA took up this issue with the relevant authorities. This clarification, we hope, will set all such challenges to rest,” ICEA said.

The industry body, whose members include firms like Apple, Vivo, and Lava, said that Electronics and IT minister Ashwini Vaishnaw led the issue to find the resolution to the challenge that industry players were facing due to different interpretations by various authorities.

“This circular is a big relief to the industry and will avoid unnecessary litigation. We also remain deeply appreciative that the Department of Revenue has acknowledged the view of MeitY on this critical issue,” ICEA Chairman Pankaj Mohindroo said.

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NavIC Rollout: No Timeline Fixed For Implementing Indigenous GPS Alternative, MeitY Says

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By ANI | Updated: 27 September 2022

The central government has said that it has held a meeting with mobile manufacturers to discuss the compatibility of the home-grown global positioning system — NavIC — in smartphones, but no timeline was fixed for its implementation.

This clarification by the government came on Monday after media reports suggested India was looking to mandate its indigenous navigation system “within months”.

The Ministry of Electronics and Information Technology (MeitY) said the meeting was “consultative”.

“A media report has claimed citing a meeting that mobile cos were asked to make smartphones compatible with NavIC within months. This is to clarify: (1) No timeline has been fixed. (2) The cited meeting was consultative; and (3) the issue is under discussion with all stakeholders,” the Ministry of Electronics and IT said in a tweet late on Monday night.

What is NavIC? How is it different from its previous version IRNSS?

NavIC (Navigation with Indian Constellation) is the name of the independent stand-alone navigation satellite system of India.

This system was earlier known as IRNSS (Indian Regional Navigation Satellite System).

The name NavIC was coined by the Prime Minister of India on the occasion of the completion of the constellation in April 2016.

Which are the navigation satellite systems operational currently in the world?

Presently, there are four global systems, GPS from the US, GLONASS from Russia, Galileo from European Union and BeiDou from China.

In addition, there are two regional systems, NavIC from India and QZSS from Japan.

What is the need for NavIC when already GPS, GLONASS, Galileo and BeiDou are operating?

GPS and GLONASS are operated by defence agencies of the respective nations. It is possible that the civilian service can be degraded or denied.

NavIC is an independent regional system over the Indian region and does not depend on other systems for providing position service within the service region.

It is fully under the control of the Government of India.

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Apple to hike App Store prices in several countries from Oct

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By: Reuters, Updated September 20, 2022

Apple Inc said on Monday prices of apps and in-app purchases on its App Store will increase in several countries including Japan, Malaysia and all territories that use the euro currency, from next month.

The new prices, excluding auto-renewable subscriptions, will be effective as early as Oct. 5, Apple said in a blog post.

These changes will also reflect new regulations for Apple in Vietnam to collect and remit applicable taxes, being value added tax (VAT) and corporate income tax (CIT) at 5% rates respectively, the company added.

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Apple plans to use latest chip tech by Taiwan’s TSMC in iPhones, Macs – Nikkei

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By: Reuters, September 14, 2022

Sept 14 (Reuters) – Apple Inc is planning to use an updated version of Taiwanese chipmaker TSMC’s (2330.TW) latest chip producing technology in iPhones and Macbooks next year, the Nikkei Asia newspaper reported on Wednesday.

The A17 mobile processor, which is currently under development, will be mass-produced using TSMC’s N3E chipmaking tech, expected to be available in the second half of next year, the report said, citing people familiar with the matter.

The A17 will be used in the premium entry in the iPhone lineup slated for release in 2023, it added.

Apple declined to comment, while TSMC did not immediately respond to Reuters request for a comment.

The current iPhone model has an A15 processor chip and in the recent Apple launch event, the company said iPhone 14 Pro models will also have the same.

The chipmaker controls about 54% of the global market for contractually produced chips, supplying firms including Apple and Qualcomm Inc.

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New Apple iPhone will be available in Russia, trade minister says

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By: Reuters, September 8, 2022

Sept 8 (Reuters) – Russians will have the chance to buy the new Apple iPhone 14 despite the U.S. tech company having left the country thanks to Moscow’s parallel import scheme, a senior government official told the RIA Novosti news agency on Thursday.

Russia announced the scheme in March when it authorised retailers to import products from abroad without the trademark owner’s permission. read more

Asked whether the new iPhone, unveiled by Apple on Wednesday, would be imported under the scheme, Trade and Industry Minister Denis Manturov said: “Why not? If consumers want to buy these phones, yes. There will be the opportunity.”

Apple halted new product sales in Russia in March, a week after Russia invaded Ukraine, though the iPhone, MacBook and other Apple goods have remained available in Russian stores as retailers sell down their remaining stock of old models and get hold of newly released devices through the import scheme.

Russian mobile network MTS on Thursday morning was already selling the new iPhone 14 models on pre-order. Prices start from 84,990 roubles ($1,398) for the 128GB version.

MTS said delivery could take up to 120 days and it retained the right to cancel orders if it faced difficulties importing the products.

Apple did not immediately respond to a request to comment.

Manturov, who is also a deputy prime minister, said last month that the scheme, which covers Western products ranging from luxury clothes to cars, could reach $16 billion in value this year, equivalent to around 4% of Russia’s 2021 imports.

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Apple to appeal Brazil sales ban of iPhone without charger

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By: Reuters, September 7, 2022

SAO PAULO, Sept 6 (Reuters) – Apple Inc said on Tuesday it will appeal a Brazilian order banning it from selling iPhones without a battery charger, pushing back on claims that the company provides an incomplete product to consumers.

The Justice Ministry fined Apple 12.275 million reais ($2.38 million) and ordered the company to cancel sales of the iPhone 12 and newer models, in addition to suspending the sale of any iPhone model that does not come with a charger.

In the order, published on Tuesday in the country’s official gazette, the ministry argued that the iPhone was lacking a essential component in a “deliberate discriminatory practice against consumers.”

The authorities rejected Apple’s argument that the practice had the purpose of reducing carbon emissions, saying there is no evidence that selling the smartphone without a charger offers environmental protections.

Apple said it would continue to work with Brazilian consumer protection agency Senacon in order to “resolve their concerns,” while saying it would appeal the decision.

“We have already won several court rulings in Brazil on this matter and we are confident that our customers are aware of the various options for charging and connecting their devices,” Apple said.

The order comes a day before Apple is expected to announce its new iPhone model.

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India considers restricting sale of sub-$150 phones by Chinese firms, Bloomberg reports

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By reuters | Updated: 29 August 2022

NEW DELHI, Aug 8 (Reuters) – India is seeking to restrict Chinese companies from its sub-$150 phone market in a bid to revive the prospects of domestic players, Bloomberg News reported on Monday, citing unidentified sources.

The move would be a blow to Chinese companies such as Xiaomi , according to the report. The plans coincide with rising concerns in India about Chinese brands undercutting local smartphone makers, it added.

It is unclear if the Indian government will announce policies or use informal channels to execute the block on Chinese smartphone makers, Bloomberg said, citing people familiar with the matter.

Chinese firms account for a major chunk of entry-level smartphones that are popular among users shifting away from traditional devices in India, which is the second largest mobile market in the world.

Indian firms such as Lava and MicroMax rapidly gained popularity after their launch over a decade ago, but have since lost market share to stiff competition from Chinese players.

Many Chinese companies have struggled to do business in India due to political tensions following a border clash in 2020. India cited security concerns in banning more than 300 Chinese apps, and has also tightened rules for Chinese companies investing in India.

Xiaomi and rival Vivo are being investigated by India’s financial crime fighting agency for alleged illegal remittances and money laundering. Both deny any wrongdoing.

The companies and the Indian government did not immediately respond to requests for comment on the report.

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