New Delhi:
India Cellular and Electronics Association (ICEA) has called for rationalization of duties on mobile phone parts and components and sub-assemblies, saying that some of the lower tariffs should be scrapped, while all import duties on ‘mechanics’ should be scrapped immediately. .
The trade association has also suggested that the government should relax Basic Customs Duty (BCD) on high-end phones.
The 20 per cent customs levy on high-end phones should only continue with a maximum BCD pegged at Rs 4,000 per device, the association said in its Budget Wish List.
Finance Minister Nirmala Sitharaman will present the EU budget for 2023-24 on 1 February. ICEA argued that tariffs on inputs and components are a barrier to increasing localization.
It has said some of the lower rates should be done away with, to support local businesses and make doing business easier. In this regard, ICEA proposed removing the 2.75 percent rate (including social security surcharge), among other smaller rates that “have no beneficial effect and are only a burden on legitimate manufacturers.”
ICEA further noted that duties on the “mechanics” are high, adding that all import duties on the mechanics should be removed immediately.
“Indian mobile industry has experienced tremendous growth in recent years and got up and running in a very short time, supported by the supportive and pragmatic policies of the government. The electronics and mobile market has also become more vibrant and mature in the country” said Pankaj Mohindroo, Chairman of ICEA, as he outlined the sector’s fiscal recommendations.
ICEA represents leading mobile phone manufacturers and players in the electronics industry.
Mohindroo said the government should look at incentives in the form of rationalization of excise duties on mobile phone parts and components.
In addition, open cell is a hugely capital intensive industry, and it is important to encourage it. However, the import duties on cells and chip-on-film (COF) have led to a reverse tax structure for open cell production in India.
ICEA recommends reducing the open cell input at zero operation. While easing the BCD on high-end phones, ICEA noted that the gray market for high-end phones has increased at the moment, resulting in revenue loss of more than Rs 4,000 crore.
“We strongly recommend increasing the domestic market for high-end phones by reducing import duties, which will also shift the support ecosystem (including after-sales) to India with more force,” said ICEA.
The association stressed that a stable tariff regime for inputs is important as stability is paramount for the industry. Constantly tinkering with tariffs on inputs makes it difficult for manufacturers to operate in a viable way, ICEA said, adding that the exemption notice must also have an expiration date of at least five years.
(Except for the headline, this story has not been edited by DailyExpertNews staff and is being published from a syndicated feed.)
Featured video of the day
‘Wealthy accumulating wealth and power’: Oxfam director of DailyExpertNews