Sony, Canon and Nikon called on the government to remove digital cameras from the highest goods and services tax (GST) slab of 28%, citing India’s commitment to the Information Technology Agreement (ITA) to persuade it to lower the levy.
“India amongst other Asian countries like China, Mauritius, Korea, Indonesia etc. signed the ITA and has met its commitment by exempting various IT products including digital cameras from the levy of basic customs duty,” they said in a letter to the GST Council and the finance ministry. “Demerit GST rate of 28% on digital camera may be inconsistent with the government’s clear intent to reduce tax rate on ITA products.”
The mass consumption of digital cameras is high, especially in tier 2 and tier 3 cities, the companies said, calling for digital cameras to be on par with other ITA products at 18%.
“India is a high-growth country for Canon and we are committed to our continued investment here,” said Gary Lee, chief financial officer, Canon India. “However, it is important that the tax regime is conducive for business–18% GST on digital cameras will also help in the Digital India initiative.”
The companies also plan to approach the Japanese embassy to take up the issue.
Under GST, which was put in place on July 1 last year, the effective rate on cameras has risen to 28% from 16-17%, which is hurting sales and it does not provide us with a level-playing field, said Sanjay Bhargava, CFO, Sony India. “We-‘re hopeful for a favourable consideration from the GST Council, he said. “We also plan to approach the Japanese embassy for putting a request to the government on behalf of the camera industry.”
Nikon India senior general manager Sandeep Chhabra echoed their sentiments. Smartphones have been classified at 12% GST rate, said the representation from the industry.
Smartphones with inbuilt cameras are eating into the digital camera market and the industry feels disadvantaged because of this.