According to media reports Department of Telecom (DoT) has urged Finance Minister to give deemed export status for telecom equipment including mobile phones and components, to boost local production and also provide a cushion to domestic makers who, it feels, are stung by a higher cost of production compared to global suppliers.
Deemed export status will allow domestic telecom gear-makers to avail of low-cost working capital finance and other export-linked incentives. In its absence, DoT feels local producers are "handicapped" against global suppliers who are backed by EXIM banks in their respective countries with low-cost working capital financing.
DoT said deemed export status would help local telecom gear companies effectively compete against foreign vendors. It has cited the instance of the "power sector" where indigenous equipment qualifies for the deemed export status.
DoT has also sought a 10-year tax holiday, including minimum alternate tax (MAT) exemption for locally manufactured telecom products with Indian IPRs. It has called for incentivising local gear manufacturers with Indian IPRs by extending a "10-year tax holiday in a block of 15 years," and also waiving "MAT payments on profits and gains from manufacturing."
Source: http://cablequest.org/news/telecom-news/item/5732-cq-dot-demands-deemed-export-status-for-telecom-equipment.html
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