The ministry of electronics and information technology (MeitY) sent a letter to the department of revenue highlighting apparent differences on the validity of customs duty levies on a key component in cellular phones, the touch panel or cover glass.
The impact could potentially disrupt India’s aspirations of becoming an electronics manufacturing hub, if the issue is not resolved immediately. The seeming differences in views between the two departments is relevant for duty evasion notices that the Directorate of Revenue Intelligence (DRI) has served on Chinese smartphone majors Oppo and Vivo.
The smartphone industry expects other companies to face similar notices, warning that the issue could hurt the industry to the tune of Rs 20,000 crore, impacting the country’s image. Recently, the DRI issued a notice to Oppo, demanding Rs 4,389 crore of customs duty, citing wrongful misdeclaration of items imported.
A spokesperson at Vivo had also received a similar notice. “The company is reviewing the notice and will cooperate with authorities and follow the course of law as required,” the spokesperson said. Oppo said it held a different view on the charges, and that it was an industry-wide issue many corporates were working on. The company will take appropriate steps including legal remedies.
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