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Apple Seeks 15-year Customs Duty Holiday Before India Setup

Last month, news reports wrote that Apple’s Taiwanese manufacturing partner Wistron is setting up a plant in Bangalore to manufacture or assemble iPhones for the tech giant.
Although there was no official confirmation from the company, everyone, including the govt, was excited. Apple, however, has now submitted pre-requisites to the Indian government to set up this plant, agreeing to which, would require a complete change in the existing policy for the entire industry.

Its application seeks “full duty exemption on manufacturing and repair inputs (raw materials), yield loss on inputs, components, capital equipment (including parts), and consumables for smartphone manufacturing and services/repair for a period of 15 years for both domestic and export markets”.

Apple’s “desired model for entry” shows that it does not intend to source components locally and hence has asked for cuts in the duty taxes on various components.
Apart from the relief on customs duty, Apple also has demands on the following:

‘Expeditious processing of Apple’s Advance Pricing Agreement in the Income Tax Department to achieve certainty on the arm’s length pricing applied to international transactions between the Indian company and its overseas affiliated companies.

And

Aligning Customs procedures to provide less intrusive inspections, “always open” clearance process, combined declarations on a periodic basis rather than declaration at each transaction, suspension of paying integrated goods and service tax at the point of importation so as to avoid actual tax payments, followed by claims for refunds so that administrative and cash flow costs could be evaded.’

Is Apple being too demanding?

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