In fact, the five-year PLI program for smartphones will leave a revenue surplus of ₹11,000 crore if only the Center’s GST (goods and services tax) collections are taken into account, the industry body said. India Cellular and Electronics Association (ICEA) in June. 5 letter to the Ministry of Finance.
The government has increased the GST on mobile phones to 18% from 12% on April 1, 2020, the day the smartphone PLI program was announced.
According to India ICEA, in the last three fiscal years – from fiscal year 21 to fiscal year 23 – the additional 6% GST resulted in an additional cumulative income of ₹42,897 crore. The total GST on mobile phones for the three-year period was ₹1,28,691 crore.
The final adjusted total expenditure for the smartphone PLI program for a five-year period now stands at ₹38,601 crore from the original ₹41,000 crore as iPhone maker Pegatron started a year late. So far, the total payout for the PLI smartphone stands at ₹1,644 crore.
“Currently, since only ₹1,644 crore has been claimed under the PLI scheme till March 31, 2023, the additional GST has created an excess of ₹41,253 crore,” ICEA said in the letter to the Secretary to income Sanjay Malhotra. that, the additional GST during the smartphone PLI program would be around ₹1,01,697 crore, ICEA said. Of this amount, the central government will collect ₹50,849 crore while retaining only its 50% share, far more than the total program expenditure.
“In summary, even if only the Center’s GST were to be considered, the smartphone PLI program over the five-year period is 100% self-sustaining and will leave a revenue surplus of ₹11,000 crore,” the body said. Of the industry.
The total GST contribution over the life of the smartphone PLI program is expected to be over ₹3,000,000. The scheme has been postponed for a year for the majority of companies due to the pandemic and will now end in 2025-26. All the selected companies, with the exception of Samsung, took the reprieve.
According to data shared with the government, since the program took effect, more than 120,000 new direct jobs have been created in the electronics sector, particularly in the smartphone manufacturing ecosystem.
On average, more than 60% of these new jobs are now held by women aged 19 to 24, mostly looking for their first job. Conservative estimates suggest that at least 250,000 new indirect jobs may have been created to support the rapidly growing electronics manufacturing ecosystem.
Mobile phone exports have gradually increased due to the PLI. In FY23, smartphone exports grew 50% to a peak of $11.5 billion.