A Taiwan based electronic manufacturing company, Foxconn on Tuesday, raised its concerns about the delays in getting the refund of Rs 1000 crore from the Government of India under the Good and Service tax regime (GST), by stating that “One of its Indian manufacturing units has left less cash which could hurt the plans to strengthen local production of electronics
Quoting to the person familiar with this matter, The Economic Times reported that “An inverted duty structure has created working capital issues as some states are lingering on a refund by month together and this is severely impacting companies like the Foxconn unit located in Andhra Pradesh, which left without funds to pay vendors.”
The person added, “The Duty structure considered inverted when components are taxed at a higher rate than the final product while the handsets are at 12% GST, while some components taxed at 18%.
While talking more about this matter, Pankaj Mohindroo, President of Indian Cellular and Electronics Association of India (ICEA) said ET that “The same refund issue is faced by some other manufacturing companies too like Wistron, which designs and manufacture some iPhone models, Dixon and a US-based Flex which cost Rs2,500 crore as a combined total.”
