google play store rejected my app due to sms permission

I also had this problem, I removed sms permissions in manifest,I tried whole day its rejected again and again, so I deleted all part of the code and I published only splash screen and login page, so my app is successfully published, and I updated my full project in next version, my application is live now.

Google have declare new policy about use of sensitive permission in your android apps. now days lot of app related this call and SMS read permission used apps removing from play store. there is options way to use it this answer

According to google "You may only request permissions that are necessary to implement critical current features or services in your application. You may not use permissions that give access to user or device data for undisclosed, unimplemented, or disallowed features or purposes".

Click Here To Read Official Google Permission Doc

If your app need to read sms for SMS-based user verification / OTP verification please use SMS Retriever API which does not needed any sms permission and your app can still read SMS for OTP verification.