Indian Cellular Association wants Tamil Nadu to rationalise tax on phone parts

CHENNAI: The Indian Cellular Association has petioned the state government of Tamil Nadu for reducing Value Added Tax on mobile phone components and accessories from 14.5% down to 5%, bringing them on par with tax levied on mobile phones.

Pankaj Mohindroo, national president of ICA and a key negotiator working for the revival of the shuttered Nokia factory, told in the letter accessed by ET that "parts, components and accessories were not extended the revised VAT jurisdiction in March 2015 and continue at 14.5%. The circle is incomplete."

Tamil Nadu faces this request to cut tax on mobile parts at a time it is protesting against the impending Goods and Services Tax. The state chief minister J Jayalalithaa had met Prime Minister Narendra Modi to push for modifications in the GST Law to ensure Tamil Nadu gets full compensation for an estimated revenue loss of Rs 9,270 crore a year.

Mohindroo also made a request for Central Sales Tax exemption on mobile phone, parts, and accessories and exemption on VAT on parts and accessories used for making phones and tablets in factories located in Tamil Nadu.