Govt rationalises duty on mobile phone parts, industry sees boost for manufacturing

Mobile phone makers have lauded the government's move to rationalise duty structure on components, saying the incidence of taxes will be 12.5% as against proposed 29.44% proposed in the budget.

"The Budget 2016 proposals had resulted in duty structure with high duty of 29.441% on key parts like batteries, chargers and headsets compared to complete mobiles which were at low duty of 12.50," Indian Cellular Association National President Pankaj Mohindroo said in a statement.

The government has removed basic customs duty (10%) and special additional duty (4%) proposed on charger, adaptor, batteries and wired headsets.

Representational image

Representational image

"The quick correction of course by the government after the Budget will create the ecosystem for mass manufacturing of both mobile phones and parts in a balanced way," said Foxconn Country Head and Managing Director Josh Foulger.

He is also co-chairman of the Fast Track Task Force panel constituted by the government to promote manufacturing of mobile devices in the country.

The government has retained countervailing duty of 12.5% on these components.

"With these amendments, the hurdles on mobile manufacturers have been removed. The road is now clear for manufacture of both smart phones and relatively low value feature phones for the common man," Lava International Chairman and Managing Director Hari Om Rai said.

The government has also removed the SAD of 2% applicable on populated printed circuit board for the manufacture of mobile phones has been withdrawn.

As of now, the exemption of BCD, CVD and SAD on PCB in the pre-budget dispensation has been restored.

Tablet computers continues in the exception in case of PCBs which means that 2% SAD only on PCBs for tablets continues as envisaged in the Budget.

Updated Date: May 07, 2016 11:27 AM

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