Mobile industry body Indian Cellular Association (ICA) has asked the Centre to advise states not to impose separate VAT on chargers that are bundled with mobile devices in a composite or single corrugated box.
The Supreme Court had passed a judgement which held that chargers should be classified as accessories even when it is bundled with mobiles in a composite/single corrugated box.
Due to this, various state governments have already started demanding separate VAT on mobile chargers by treating it as an accessory for the purpose of taxation.
"This has generated great uncertainty which has been prevailing in the minds of investors," ICA National President Pankaj Mohindroo said in a letter to Finance Minister Arun Jaitley.
ICA said centre should take this up with the state governments to issue general clarification on accessories based on the Customs Accessories (condition) Rules, 1963.
The Customs Accessories (Condition) Rules, 1963, specifically provides that accessories compulsorily supplied free with an article should attract the same rate of duty, which is applicable on the imported article, ICA said.
"World over, essential accessories which come as composite part of mobile handset packs are treated as one unit and taxed at the same rate as mobile handsets," Mohindroo added.
