In a bid to spur domestic manufacturing, the government today said the excise duties on mobile handsets will be restructured to six per cent for all categories.
"To encourage domestic production of mobile handsets (which has declined) and reduce the dependence on imports (which have increased), I propose to restructure the excise duties for all categories of mobile handsets," Finance Minister P Chidambaram said while presenting the Interim Budget 2014-15.
"The rates will be six per cent with CENVAT credit or one cent without CENVAT credit," he added.
"I would like to thank Finance Minister for the attention to mobile handset segment. We have to go through the fine print before coming to any conclusion," Indian Cellular Association National President Pankaj Mohindroo said in his reaction.
Electronic component manufacturer association ELCINA said the announcement does not look promising for domestic firms.
"At first glance, I think it is not going to be a disincentive to trading. One per cent credit without CENVAT credit is too less," ELCINA Secretary General Rajoo Goel said.
As part of last year's budget, the government had raised the excise duty to six per cent on handsets priced above Rs 2,000.