NEW DELHI: Assocham today urged the government to extend income tax waiver benefits to mobile handset manufacturing sector in backward areas from 5 years to 10 years to help industry meet 100 per cent local demand for cellphones.

"This (income tax waiver benefits) will encourage mobile handset manufacturers to explore manufacturing in backward and ulterior areas which will also create employment opportunities for locals," the chamber said. In addition, it has demanded withdrawal of safeguard customs duty of one per cent on mobile phones with immediate effect to help broad base their sales at reasonable prices. In a representation submitted to Ministries of Telecommunications, Commerce & Industry and the Finance, it has also sought that element of value added tax, which currently varies between 6-14 per cent, should be lowered to less than four per cent.

"The aforesaid measures have become necessary to bring ‘aam admi’ at countryside to telecommunication inclusion at affordable rates," Assocham president Swati Piramal said. Dr Piramal said communication is a vital tool in social and economic development in India and therefore, availability of quality mobile handsets to everyone, especially those in villages and rural areas, at affordable price is critical. She added that imposition of any customs duty will result in increase in cost of cellphones, adversely impact common man’s pocket and accessibility of mobiles to everyone. It will also widen parallel grey market offering cheap quality
products, thereby denting government revenue in this respect.