Its a 'No' from Indian govt for Apple's ‘Tax Incentive Demands’

The Indian government has rejected 'most of the demands' on tax incentives that Apple had sought for establishing a manufacturing base in the country.

According to an ET report, Department of Revenue in Commerce Ministry said ‘no’ to the tax incentives which among other things included relaxation in the 30 percent local sourcing of components which other manufacturers did not enjoy.

This, however, should not affect Apple's first plant being set up in Bangalore by contract manufacturer Wistron. Notably, the government had made it clear earlier too that in the face of Goods and Services Tax (GST) taking effect later this year, it is not possible to give exemptions to individual companies.

With slowing growth in the U.S. and China, this rejection may upset company’s India targets, which still remains a potential market and presents hope to the company.

Apple had sought the concessions from the government to incentivise the high-end component manufacturers of iPhones to move to India as, without their presence, it will be difficult for the iPhone maker to start full-fledged manufacturing operations locally.

Besides 30 percent relaxation in the component sourcing, Apple had also asked an exemption from the Customs duty on imports of components and equipment for 15 years.