Cellphone Makers Laud Rationalised Duty Structure on Components

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

"The Budget 2016 proposals had resulted in duty structure with high duty of 29.441 per cent 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 per cent) and special additional duty (4 per cent) proposed on charger, adaptor, batteries and wired headsets.

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

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

The government has retained countervailing duty of 12.5 per cent 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the SAD of 2 per cent applicable on populated printed circuit board for the manufacture of mobile phones has been withdrawn.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 per cent SAD only on PCBs for tablets continues as envisaged in the Budget.