Customs duty on electronic transmissions will hit semiconductor design locally: Industry bodies

economictimes.indiatimes.com:

World Trade Organization’s (WTO) 13th ministerial conference to refrain from extending a moratorium on imposing customs duties on electronic transmissions would impact the semiconductor design ecosystem in India, industry bodies told ET.

The moratorium expires in February-March this year. WTO members had agreed against imposing customs duties on electronic transmissions since 1998 and the moratorium has been periodically extended at successive ministerial conferences, which is the highest decision-making body of the 164-member organisation.

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Ashok Chandak, president, India Electronics & Semiconductor Association (IESA), told ET, that the industry body has submitted a representation to the Indian government to not impose customs duties on electronic transmissions. IESA has over 300 electronic companies as its members, including 100 semiconductor companies.
“It’s a concern. All our design activities utilise data. Our member semiconductor companies have their offices in Europe, US, and Japan and in other countries. The design data exchange keeps happening. How can one tax that data exchange? We have been opposing this,” he said.

During chip design, data exchange happens between multiple locations. “If this exchange of design data files is taxed, how will the value be defined? Today, there’s no customs duty. There is no commercial market price defined,” he said.

Chandak cited examples of companies like Qualcomm, Intel, NXP, Texas Instruments, and Analog