The very anticipated Union Budget 2018 has already been presented in the Parliament by Finance Minister Arun Jaitley. Focusing specifically on a pro-poor budget, it seems like, Financial Minister forgot to include the technology industry among the beneficiaries. Earlier it was reported that the technology industry was looking up for a boost in their business after the Budget 2018 but things didn’t go according to them and after reviewing the budget briefly, it is for sure that the technology industry is not going to gain much out of it.
Aiming at a boost in domestic manufacturing, Finance Minister’s budget lifts customs duty on mobile phones to 20% from 15%. That might lower returns for technology giants like Apple Inc. and Samsung Electronics as they seek profits in one of the world’s fastest-growing mobile phone markets. It may also bring some kind of a downfall to their business in India or force them to pay out to set up local factories. However, this may also provide jobs to locals but that’s still an option which might be opted or might not be.
Earlier, many tech-industrialists believed that the existing GST rates are in order. They said that the new budget should take special measures to efficiently upgrade the digital infrastructure in all parts of the country. Need for more high-speed internet networks to penetrate further into the cities, villages and towns was also felt making those areas smartphone friendly and maintaining better connectivity. They also suggested that the government should reduce the GST on mobile handsets from 12% to 5%, especially for the smartphones under Rs 10,000. With a 12% GST on mobile phones, they are still costlier by 4-5% and has also taken away the benefit under duty-differential, being offered to local manufacturers.
Some manufacturers also expected that the finance ministry should work on a proposal to increase the tax exemption limit from Rs 2.5 lakh per annum to Rs 3 lakh or more and introduce some changes in the tax slabs to lighten the taxpayers’ burden along with a series of populist policies in this year’s budget including a reduction in corporate tax to attract investments. Although the words of Finance Minister has been marked and unchanged for now, and the customs duty on mobile phones will remain to 20% for this Financial Year.