Samsung Electronics may be forced to forego perks during the first year of its production-linked incentive (PLI) scheme in India. Due to some invoicing inconsistencies, the Korean tech giant may forfeit the initial incentives under the PLI scheme for smartphone manufacture in India.
Samsung, on the other hand, stated that it is in advanced conversations with the Centre to fix the matter. In 2021, the electronics giant claimed a payout of Rs 900 crores as an incentive for exceeding Rs 15,000 crore in sales over the preceding year.
To secure these concessions, Samsung had to manufacture devices at a cost of about Rs 15,000 crore. However, the Ministry of Electronics and Information Technology (MeitY) withheld the payment due to various irregularities in the company’s invoicing, according to reports.
According to the report, incentives for the PLI scheme’s second year (FY 2022) will begin soon. Samsung’s competitors, including iPhone producers Foxconn (Hon Hai) and Wistron, as well as domestic firms like Dixon Technologies, have already gotten FY22 sops.
Samsung is in early talks with the Centre over incentive payouts.
India launched the PLI scheme for mobile handsets in August 202, with a five-year investment of Rs 40,951 crore. For the first two years, the PLI system provides graded incentives worth 6% of increased sales of items over the base year.
Companies receive 5% bonuses in the third and fourth years. These incentives will be reduced by 4% in the fifth year. However, global corporations must invest at least Rs 250 crore in the first fiscal year, and similar amounts in the following three fiscal years, and produce incremental goods worth Rs 4,000 crore, Rs 8,000 crore, Rs 15,000 crore, Rs 25,000 crore, and finally Rs 50,000 crore in five consecutive years.
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