GST on mobile phones hiked to 18% from 12%

Source: Business Standard, Mar 14, 2020

New Delhi: In a move that is likely to make mobile phones more expensive, GST Council today proposed a high in the Goods and Services Tax (GST) rates on mobile phones and allied parts.

Addressing a press conference following the GST Council meet, Finance Minister Nirmala Sitharaman said the Council also brought the manufacture of matches to a common rate of 12 per cent across the board. Earlier, hand-made matches attracted 5 per cent, while machine-made ones attracted 18 per cent.

She also said interest for delayed GST payment will be charged on net tax liability, not gross tax liability, and would be effective July.

Sitharaman said all decisions taken at today’s GST Council meeting would come into effect on April 1.

Stating that a there were a host of technical glitches in GST administration, the minister said she was engaging with Infosys to implement reforms and had asked the firm to come up with a sustainable solution. She added that Nandan Nilekani had made a presentation to this effect today and that she had asked Infosys to be present for the next three GST council meetings.

Sitharaman also called for better coordination between Tech Mahindra and Infosys without the Ministry’s intervention. She said that tasks that were earlier to be completed by January 2021 will now be accomplished by Jun 2020.

GST on MRO services with respect of aircraft has been brought down from 18 per cent to 5 per cent, with full input tax credit (ITC) The due date for filing the annual return for FY 2018-19 has been extended to June 30. Sitharaman said late fees would not be levied for delayed filing and reconciliation statement for 2 years, for taxpayers with turnover less than Rs 2 crore.

Smartphone companies warn India of looming WTO probe into duty format

Source: The Economic Times, Mar 10, 2020

NEW DELHI: Smartphone makers including Apple and Lava have told the government that India’s $28 billion handset manufacturing industry faces a looming threat posed by an EU request for a WTO panel to probe the country’s high basic customs duty on high-end smartphones.

“If India loses the case, not only will it have a devastating effect on tariffs of high-end phones, but in fact the entire range of mobile handsets manufactured in India,” Pankaj Mohindroo, chairman of the Indian Cellular & Electronic Association (ICEA), said in a letter to revenue secretary Ajay Bhushan Pandey, electronics and information technology secretary Ajay Sawhney and commerce secretary Anup Wadhawan. ICEA represents Apple, Foxconn, Flextronics and other device and electronic manufacturers. Read the rest of this entry »

Relief in the works for AGR-hit telecom companies

Source: The Economic Times, Mar 06, 2020

NEW DELHI: The government is working on steps to provide relief to the telecom sector that will need to be ratified by the Cabinet, a senior official said, raising the prospect of a possible reprieve for financially strapped Vodafone Idea, which faces AGR dues of Rs 53,000 crore. On the eve of Vodafone Group CEO Nick Read’s visit to India, the official said any package will need to conform to the Supreme Court’s AGR ruling. The next hearing is on March 17.

“Any decision will have to be cleared by the Cabinet. The government’s intent is clear — it does not want any company to close down,” the official told ET. “However, the relief will be for everyone, not just Vodafone Idea.” Read the rest of this entry »

Voda Idea, Airtel, Jio pay over Rs 6,000 cr to DoT towards spectrum dues

Source: Business Standard, Mar 03, 2020

Three private telcos — Vodafone Idea, Bharti Airtel and Reliance Jio — on Tuesday paid Rs 6,046 crore to the Department of Telecommunications (DoT) towards deferred spectrum dues. Vodafone Idea paid about Rs 3,043 crore, Bharti Airtel has made the payment of Rs 1,950 crore to the telecom department towards its deferred spectrum dues, while Reliance Jio paid Rs 1,053 crore.

Vodafone Idea’s payment in particular assumes significance as the company has been under tremendous financial pressure and is confronted with AGR (adjusted gross revenue) liabilities of over Rs 53,000 crore.

This is the last lot of payments that telcos will make towards deferred spectrum liabilities to the DoT, as the Union Cabinet had late last year approved a two-year moratorium on spectrum dues. On November 20, 2019, the Union Cabinet approved a moratorium of two years for spectrum payments. The move to defer payments for 2020-21 and 2021-22 will give Rs 42,000-crore relief to Airtel, Vodafone Idea and Jio.

Realme launches first 5G smartphone in India

Source: The Economic Times, Feb 24, 2019

New Delhi: Chinese handset maker Realme on Monday launched first 5G smartphone models in India at a price starting Rs 37,999 onwards. While the new smartphone models in the Realme X50 Pro 5G series are the most expensive handsets from Realme, industry analysts see it of no value for customers in India in the absence of the 5G network.

“We are proud to unveil India’s first 5G, super-fast, and performance-driven smartphone — the flagship Realme X50 Pro 5G today (Monday),” Realme India CEO Madhav Seth said.

The company has fixed the prices of its three variants at Rs 37,999, Rs 39,999 and Rs 44,999, depending upon the memory storage capacity.

“For users, I do not see any convincing reason to go for a 5G phone… For Indian users, it will make sense to go for 5G phones in the first half of 2022. Invariable good thing that OEMs (phone makers) will do is that over a period of time, the price will go down,” Faisal Kawoosa, founder and chief analyst of market research firm TechARC, said.

He said that in the past, 4G handsets were launched at a price of around Rs 45,000 but gradually, the prices came down.

“I think that by 2022, India will have 5G network and that is when consumers will have a reason to buy 5G phones. The prices will come down substantially by then,” Kawoosa said.
According to Realme, the new 5G smartphone models have dual SIM slots that will enable users to access both 4G and 5G services at the same time and either of the two SIM cards can be activated as the primary 5G SIM card.

“5G smartphone will only matter when India has 5G networks. For now, smartphone makers should not even market it as a feature as it’s nothing but a gimmick. By the time Indians get 5G connectivity in the next 2-3 years, these 5G smartphones will be an obsolete technology,” The Unbiased Blog founder Nikhil Chawla said.

Realme announced that it will sell the 5G smartphone models through e-commerce portal Flipkart, starting Monday.

DoT gets right to bar Chinese firms from govt telecom tenders

Source: LiveMint.com, Feb 20, 2020

NEW DELHI: The department of telecommunications (DoT) now has the power to bar Chinese telecom equipment suppliers from participating in tenders floated by state-run companies and central and state governments, according to a government notification issued on Wednesday.

Government projects in India use telecom gear in areas such as railways, smart cities mission and state government fibre connectivity projects as well as BharatNet, India’s mission to provide internet to gram panchayats.

The move is set to hit Chinese companies such as Huawei, ZTE, and UTStarcom that may not be allowed to participate in government projects.

The notification was issued just a few days before the visit of US President Donald Trump, who has claimed that Chinese telecom equipment suppliers pose a national security risk. The US has also pressed its allies to ban companies such as Huawei from participating in 5G networks.

The provision of clause 10(d) of Public Procurement (Preference to Make in India) Order 2017 can be invoked in relation to certain telecom items against any foreign government that does not allow “Indian suppliers to participate and/or compete in procurement of telecom equipment”, according to a DoT letter addressed to all central and state government departments and public sector units dated 19 February.

The eight items listed in the letter include optical fibre, 2G/3G/4G/LTE modems, routers, Wi-Fi based broadband wireless access system and GPON equipment. All these items are critical to setting up a telecom network. Mint has seen a copy of the letter.

The notification does not mention China, but the implications for Chinese companies are clear as their government does not encourage Indian suppliers in sectors such as telecom and power.

“The Department for Promotion of Industry and Internal Trade has identified DoT as the nodal department for implementing the provisions related to procurement of goods, services or works related to the telecommunication sector,” the letter said.

The Public Procurement Order 2017 stipulates that if a nodal ministry is satisfied that Indian suppliers of an item are not allowed to participate and/or compete in procurement by any foreign government, it may, if it deems appropriate, restrict or exclude bidders from that country from being eligible for supplying that item and/or other items relating to the nodal ministry.

“Further the provision of clause 10(d) should find clear and specific mention in any telecom equipment procurement tender floated by any government/PSU procurement agency,” the letter said.

This also comes at a time when India is gearing up to roll out 5G in the country and has invited all companies to conduct 5G trials.

Huawei has teamed up with Bharti Airtel and Vodafone Idea for trials even as the Chinese telecom equipment maker faces global scrutiny over network security concerns. The US has claimed that Huwaei’s 5G equipment could be used by China to spy on other countries, an allegation the company has repeatedly denied.

Analysts, however, believe that this move to bar Chinese companies will hurt India, given that half of its 1.3 billion population does not have internet connectivity.

“The move will come at a cost. Chinese companies are the most price competitive in the industry,” said Mahesh Uppal, director of communications consulting firm ComFirst India.

“Competition between countries should be played out elsewhere. It would have been better if it could be done without impact on the Indian digital dream.” An email sent to Huawei was unanswered till press time. ZTE and UTStarcom could not immediately be reached for comment.

Bharti Airtel second most valuable mobile operator in emerging Asia

Source: Business Standard, Feb 13, 2019

Mumbai: Bharti Airtel has emerged as the second most valuable mobile operator among emerging markets in Asia behind China Mobile, thanks to a surge in its share price and equity expansion in the past one year.

At its current market capitalisation (m-cap) of around $41 billion, Airtel is ahead of Emirates Telecom, Telekom Indonesia and China Unicom. China Mobile remains Asia’s top mobile operator with m-cap of $175 billion, according to data from Bloomberg.

Including Japan, which is a developed market, Airtel is the fifth most valuable mobile operator on the continent behind China Mobile, NTT, NTT Docomo, and KDDI Corp. Last year, Airtel was the seventh largest mobile operator in emerging Asia behind South Korea’s SK Telecom and Telekom Indonesia in terms of m-cap. Read the rest of this entry »