Smartphone Display Assembly With Parts Fitted to Attract 15 Percent Import Duty, CBIC Says
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.
Xiaomi Partners With Dixon Technologies to Make Mobile Phones in India
By Reuters | Updated: 31 May 2023
Contract manufacturer Dixon Technologies (India) on Wednesday said it is partnering with Xiaomi’s Indian arm to make and export phones for the Chinese firm.
The news, which boosted Dixon’s shares by 4 percent, comes after Xiaomi India revealed plans to start making wireless audio products in the country by partnering with electronics manufacturer Optiemus.
India has been encouraging global companies to invest more in local manufacturing as a part of its efforts to become a powerhouse in the global electronics supply chain.
Earlier in March, Xiaomi India President Muralikrishnan B. told Reuters that the company will open more stores beyond its current network of 20,000 retail partners and boost local procurement of mobile phone parts, in an effort to reduce costs.
Earlier this week, Xiaomi India said that it will make its first local audio gadget at Optiemus Electronics’ factory in the northern state of Uttar Pradesh, the company said in a statement, reiterating that it was targeting a 50 percent increase in the production of components locally sourced by 2025.
The push comes as the manufacturer of the Redmi brand of smartphones recently lost out to South Korean rival Samsung as India’s top smartphone company.
Xiaomi, which locally manufactures most of the smartphones and TVs it sells in India, did not say when it will start making the audio products. It sells speakers, earbuds, and wired and wireless headphones in India.
In March, Xiaomi was reported to be overhauling its India strategy after misjudging consumer tastes in mobile phones, a costly lapse that allowed Samsung Electronics to pip the Chinese company to the top spot in the world’s second biggest market for the devices.
© Thomson Reuters 2023
MediaTek Says It Will Use Arm’s Latest Mobile Chip Technology for Next-Generation Smartphones
By Reuters | Updated: 29 May 2023
Arm on Monday rolled out new chip technology for mobile devices and Taiwan smartphone chip maker MediaTek said it will be using it for its next-generation product.
MediaTek, a longtime supplier of low- and mid-tier smart phone chips, has been pushing into the market to supply chips for premium smartphones, once dominated by rival Qualcomm, which has been in a legal battle with Arm since last year over chip licensing agreements.
In Arm’s blog announcing the new products, MediaTek said the new chips will help improve the performance of its next-generation smartphones.
Arm sells blueprints chip designers use to build their own hardware. It is launching Immortalis-G720, a chip for video image processing and AI applications, and the Cortex-X4, a processor that would be the brains of the mobile device at Taiwan’s Computex conference.
Arm said both new chips have 15 percent better performance than their previous generations, and the Cortex-X4 uses 40 percent less power, key for smartphones that need to keep battery use time long.
Arm also said it has “taped out” the Cortex-X4 at Taiwan Semiconductor Manufacturing Co., which means it had a chip manufactured at the factory, an expensive process usually done by chip designers that sell the final chip.
Asked by Reuters during a briefing if the tape out meant Arm was making a chip to sell instead of its long-time business model of providing the blueprint to chip makers, Chris Bergey, the general manager of Arm’s Client Line of Business, said this was a step it sometimes takes to help test out new manufacturing technology for customers.
“Arm is not in the business of selling chips. That’s not what we do,” he said.
Last month the Financial Times reported that Arm was developing its own chip to showcase the capabilities of its designs.
Arm said the Cortex-X4 was taped out on TSMC’s N3E process and said it was an industry first.
© Thomson Reuters 2023
Daam Virus That Steals Call Logs, History and Accesses Cameras Spreading on Android Phones, CERT-in Warns
By Press Trust of India | Updated: 27 May 2023
An Android malware called ‘Daam’ that infects mobile phones and hacks into sensitive data like call records, contacts, history and camera has been found to be spreading, the national cyber security agency has said in its latest advisory.
The virus is also capable of “bypassing anti-virus programs and deploying ransomware on the targeted devices”, the Indian Computer Emergency Response Team or CERT-In said.
The agency is the federal technology arm to combat cyber attacks and guard the cyber space against phishing and hacking assaults and similar online attacks.
The Android botnet gets distributed through third-party websites or applications downloaded from untrusted/unknown sources, the agency said.
“Once it is placed in the device, the malware tries to bypass the security check of the device and after a successful attempt, it attempts to steal sensitive data, and permissions such as reading history and bookmarks, killing background processing, and reading call logs etc,” the advisory said.
‘Daam’ is also capable of hacking phone call recordings, contacts, gaining access to camera, modifying device passwords, capturing screenshots, stealing SMSes, downloading/uploading files, etc. and transmitting to the C2 (command-and-control) server from the victim’s (affected persons) device, the advisory said.
The malware, it said, utilises the AES (advanced encryption standard) encryption algorithm to code files in the victim’s device.
Other files are then deleted from the local storage, leaving only the encrypted files with “.enc” extension and a ransom note that says “readme_now.txt”, the advisory said.
The central agency suggested a number of do’s and don’ts to avoid getting attacked by such viruses and malware.
The Cert-In advised against browsing “un-trusted websites” or clicking on “un-trusted links”. Caution should be exercised while clicking on any link provided in unsolicited emails and SMSes, it said. Install and maintain updated anti-virus and anti-spyware software, it suggested.
It also suggested that users should be on the lookout for “suspicious numbers” that don’t look like “real mobile phone numbers” as scammers often mask their identity by using email-to-text services to avoid revealing their actual phone number.
“Genuine SMS messages received from banks usually contain sender ID (consisting of bank’s short name) instead of a phone number in the sender information field,” it said.
It also asked users to exercise caution towards shortened URLs (uniform resource locators), such as those involving ‘bitly’ and ‘tinyurl’ hyperlinks like: “http://bit.ly/” “nbit.ly” and “tinyurl.com/”.
Users are advised to hover their cursors over the shortened URLs to see the full website domain which they are visiting or use a URL checker that will allow the user to enter a short URL and view the full URL, the advisory suggested.
India’s Import of Mobile Phones, Laptops, PCs, Other Devices from China Declined in FY 2022-23: Report
By Press Trust of India | Updated: 16 May 2023
India’s imports of electronic goods such as laptops, personal computers (PCs), integrated circuits and solar cells from China declined during 2022-23, according to a report by economic think tank GTRI. The fall in imports is notable in electronic items where the PLI (production linked incentive) scheme is operational, the report by Global Trade Research Initiative (GTRI) said.
Import of medical equipment declined 13.6 percent to $2.2 billion (roughly Rs. 18,087 crore) last fiscal year as compared to 2021-22. Similarly, import of solar cells, parts, diodes slumped 70.9 percent to $1.9 billion (roughly Rs. 15,620 crore) in 2022-23.
The report stated that import of laptops, PCs slipped 23.1 percent to $4.1 billion (roughly Rs. 33,707 crore) and that of mobile phones came down by 4.1 percent to $857 million (roughly Rs. 7,000 crore) in last financial year as compared to 2021-22.
Inbound shipments of integrated circuits contracted by 4.5 percent to $4.7 billion (roughly Rs. 38,640 crore). Import of urea and other fertilizers declined 26 percent to $2.3 billion (roughly Rs. 18,909 crore) in 2022-23.
However, import of lithium-ion batteries surged about 96 percent to $2.2 billion last fiscal year, it said adding the adoption of electric vehicles may increase such imports steeply.
“India’s imports from China have shown signs of slowing down, with three data points indicating a decline. Firstly, India’s electronics imports from China have decreased from $30.3 billion in FY22 to $27.6 billion in FY23. Secondly, India’s total goods imports from China grew at a lower rate of 4.2 percent during FY23, compared to global imports, which grew at a higher rate of 16.1 percent,” GTRI co-founder Ajay Srivastava said.
Lastly, China’s share in India’s merchandise import decreased from 16.4 percent in FY18 to 13.8 percent in FY23, a decline of 15.7 percent.
Product categories where the country’s imports from China have registered growth include machinery, chemicals, steel, PVC resin and plastics.
It also said China’s share in India’s merchandise imports decreased from 16.4 percent in 2017-18 to 13.8 percent in 2022-23.
Despite the decline, China remains India’s top import supplier, and India is critically dependent on China for various products, the report said, adding “Imports from China are high for most countries and India is not an outlier”.
India’s total goods import from China during 2022-23 touched about $91 billion (roughly Rs. 7,48,161 crore). It was $94.6 billion (roughly Rs. 7,77,758 crore) in 2021-22.
Further at the exports front, China is India’s fourth largest export destination, with the US, UAE, and Netherlands as the top three partners.
Indian exports grew to all these three nations but declined for China in the last fiscal. The country’s outbound shipments to China declined 36 percent to $13.6 billion in 2022-23.
Srivastava said India’s fate in electronics and computer hardware production was sealed with India’s signing of the Information Technology Agreement (ITA) in 1997 that made importing any import duties on such products illegal.
“PLI is trying to undo the damage in a limited way. Positive results are visible in the decrease in importing electronic products from China,” he said adding that to move at a faster pace, India must invest in deep manufacturing.
“For EV batteries, we must produce Lithium-ion cells; for laptops, we must make PCB; for mobile phones, we must make components and not merely the outer shell of the final product,” he said.
Government to Soon Roll Out Pan-India System to Track, Block Lost Phones
By Press Trust of India | Updated: 15 May 2023
People will be able to block and track their lost or stolen mobile phones across India with the rollout of a tracking system by the government this week, a senior government official said.
Technology development body Centre for Department of Telematics (CDoT) has been running the pilot of the CEIR system in some of the telecom circles, including Delhi, Maharashtra, Karnataka, and North East region, and the system is now ready for pan-India deployment, a DoT official, who did not wish to be identified, told PTI.
“CEIR system is scheduled for pan-India launch on May 17,” the official said.
When contacted, Chief Executive Officer and Chairman Project Board at CDoT Rajkumar Upadhyay did not confirm the date but confirmed that the technology is ready for pan-India deployment.
“The system is ready and now it will be deployed across India in this quarter. This will enable people to block and track their lost mobile phones,” Upadhyay said.
CDoT has been able to add features to check the use of cloned mobile phones across all telecom networks.
The government has made it mandatory to disclose IMEI — a 15-digit unique numeric identifier — of mobile devices before their sale in India.
The mobile networks will have access to the list of approved IMEI numbers which will check the entry of any unauthorised mobile phones on their network.
Telecom operators and CEIR system will have visibility into IMEI number of the device and mobile number linked to it, and the information is being used in some states to track your lost or stolen mobiles through CEIR.
“One of the common practices is that miscreants change IMEI number of stolen mobile phones which prevents tracking and blocking of such handsets. It was a national security issue. The CEIR will be able to block any cloned mobile phones on the network with the help of various databases,” Upadhyay said.
The basic purpose of CEIR is to ease reporting of stolen and lost mobiles and block the use of mobiles all over the country. This will discourage the theft of mobile phones, enable the tracing of the stolen and lost mobiles to the police, detection of cloned or counterfeit mobiles, restrict the use of such cloned mobiles, as well as protect the interest of the consumers by making them aware of the information related to fake and cloned mobile phones.
Recently, Karnataka Police recovered and handed over more than 2,500 lost mobile phones to their owners using the CEIR system.
Apple already has a system to track lost mobile phones with the help of Apple ID but major issues have been around Android mobile phones.
With the new system in place, it will be futile to use stolen mobile phones.
“The system has an in-built mechanism which will also check the smuggling of phones and help the government from revenue loss to the exchequer as well,” Upadhyay added.
Apple Supplier Foxconn to Set Up $500 Million Manufacturing Plant in Telangana; Will Create 25,000 Jobs
By Reuters | Updated: 15 May 2023
Apple supplier Foxconn will invest $500 million to set up manufacturing plants in the southern Indian state of Telangana, the state’s IT minister said on Monday.
The investment will create 25,000 jobs in the first phase, K.T. Rama Rao said in a tweet.
Reuters in March reported that Foxconn had won an order to make AirPods for Apple and planned to build a factory in India to manufacture the products.
The deal will see Foxconn, the world’s largest contract electronics maker and assembler of around 70 percent of all iPhone models, become an AirPods supplier for the first time and underlines efforts by the key Apple supplier to further diversify production away from China. AirPods are currently made by a range of Chinese suppliers.
Apple has been shifting production away from China, where prior COVID restrictions disrupted the manufacturing of new iPhone models and other devices. The tech company is also looking to avoid a hit to its business due to tensions between Beijing and Washington.
Demonstrating the “Telangana Speed”, I am happy to announce the groundbreaking of first of Foxconn’s plants in Telangana at Kongar Kalaan today
With an investment of over $500M it shall create 25,000 direct jobs in first Phase #Telangana #Foxconn pic.twitter.com/PHThJWxsfT— KTR (@KTRBRS) May 15, 2023
Foxconn in late March received approval from the Karnataka government for a $968 million (roughly Rs. 7,964 crore) investment in the state.
The company said in March it planned to ramp up investment outside of China and efforts to attract automakers to its contract manufacturing business, after reporting weaker demand for consumer electronics.
Earlier this month, Foxconn said its revenue in April fell 11.77 percent year-on-year due to weakness in smart consumer electronics, and expected business to drop this quarter. The Apple supplier said revenue last month reached T$429.2 billion (roughly Rs. 1,31,200 crore), in line with the company’s own expectations.
© Thomson Reuters 2023
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