Apple Urges India to Amend Tax Law Hindering its Expansion Plans

According to reports, Apple is urging the Centre to loosen income tax regulations pertaining to the ownership of “high-end” iPhone equipment that the massive tech company supplies to its contract manufacturers. According to sources who spoke to Reuters, Apple executives have been in discussions with Indian officials in recent months to change the law to exempt the corporation from paying taxes for owning the equipment.

According to the article, the business is concerned that the taxes will impede its ability to expand in the nation in the future. For example, Foxconn and Tata, Apple’s contract manufacturers in India, have invested billions of dollars to establish facilities there.

However, the acquisition of these expensive tools for iPhone production accounts for millions of those costs. The report also asserted that contract manufacturers are limited in their ability to provide funds. Changes to the legacy law will make it easier for Apple to grow. India can raise its level of international competitiveness.

Apple Finds Income Tax Act, 1961 is the Biggest Issue

The Income Tax Act of 1961, which views foreign ownership of industrial equipment as a “business connection”, is at the heart of the controversy. As a result, Apple’s iPhone profits are allegedly subject to national taxes.

The article further stated that if Apple changes its “business practices” in the nation without persuading the central government to amend the tax regulations governing foreign ownership of equipment used in India, the corporation may be subject to billions of dollars in additional taxes.

According to reports, a top Indian official stated that talks were still going on and that it is a “tough call” because Apple’s expanded investments are “equally important. “Investments are needed in India. We must come up with a solution,” the official continued. The government apparently seems wary, though, because any modifications to the income tax regulations may make it less sovereign to tax a foreign corporation.

Apple on an Expansion Spree in India

This development coincides with the Cupertino-based titan’s aggressive expansion of its domestic production capability. As part of this, it started manufacturing the most recent iPhone 17 series in India as soon as it was released.

According to reports earlier this month, Apple exported a record $10 billion worth of iPhones from India between April and September, a 75% increase over the $5.71 billion it exported during the same period last year. As trade tensions between Washington, DC, and Beijing flare, the business intends to move all of its iPhone assembly from the US to India by early next year. The corporation is increasing iPhone manufacture in India at the same time as the export.

Foxconn’s new Bengaluru facility and Tata Electronics’ Hosur plant both started production in April of this year, bringing the big tech giant’s Indian manufacturing network to five locations. Foxconn has invested INR 15,000 Cr to strengthen its operations in the state and support internal R&D activities, according to a statement made a few days ago by Tamil Nadu’s industries minister, TRB Rajaa.