iPhone maker Apple's demand for custom duty rebate on imported equipment has been turned down.
In a written reply to the Lok Sabha, commerce and industry minister Nirmala Sitharaman said "requests regarding such rebate were examined and... not accepted."
The demand was rejected on grounds that already, zero basic customs duty, excise duty — except on charger, battery and speaker — and special additional duty (SAD) had been prescribed for components and accessories for final manufacture of mobile phones, tablets and computers.
Sitharaman said the government has received representations seeking concessions, including 30% local sourcing of component, duty exemption on manufacturing and repair units, components, capital equipment and consumables for smartphone manufacturing, service and repair.
"However, with a view to promote domestic manufacturing capacities and value addition, it has further been provided that this relaxation will be valid for an initial period of three years from the opening of the first store, and thereafter, such entities will be required to meet domestic sourcing norms," she told the Parliament.
The commerce minister also stated that there is no exemption from basic custom duty, countervailing duty (CVD) and SAD on imports of articles for repair of mobile.
Foreign investment up to 100% is permitted for a company engaged in manufacturing mobile phones. Under the automatic route, investment can be made without prior approval either of the government or the Reserve Bank of India.
Sitharaman also told the Lok Sabha that all existing exemption from excise to CVD will also be reviewed by the GST Council. With effect from July 1, both domestically manufactured and imported mobile phones attract 12% GST.