The India Cellular and Electronics Association (ICEA) has pitched for rationalization of duties on parts and components of mobile phones and sub-assemblies, saying some minor tariffs should be eliminated, while all inputs on ‘mechanics’ The charges should be dropped immediately. ,
The industry body has also suggested that the government should reduce basic customs duty (BCD) on high-end phones.
The association, in its budget wish list, has said that 20 per cent customs duty on high-end phones should be continued with a maximum BCD of only Rs 4,000 per device.
Finance Minister Nirmala Sitharaman will present the Union Budget 2023-24 on 1 February. ICEA argued that tariffs on inputs and components are a hindrance to increasing localisation.
It has said that some minor tariffs should be done away with to support local businesses and ease of doing business. In this regard, the ICEA suggested that the tariff of 2.75 per cent (including social welfare surcharge), among other minor tariffs, “has no beneficial effect and only creates a burden for legitimate manufacturers”, needs to be removed. .
ICEA further said that the duty on ‘mechanics’ is high, and said that all input duties on mechanics should be removed immediately.
“The Indian mobile industry has witnessed tremendous growth over the last few years and is back on its feet in a short span of 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,” Pankaj Mahendru, President, ICEA said while outlining the budget recommendations of the industry.
ICEA represents major mobile phone manufacturers and electronics industry players.
Mahendru said the government should consider incentives in the form of rationalizing duties on parts and components of mobile phones.
Additionally, open sale is a highly capital-intensive industry, and it is important to encourage it. However, the duty levied on Cell and Chip on Film (COF) has created an inverted duty structure for open cell manufacturing in India.
ICEA recommends reducing the input of open cells to zero duty. On easing BCD on high-end phones, the ICEA said that at present, the gray market for high-end phones has increased, causing a revenue loss of over Rs 4000 crore.
ICEA suggested, “We strongly recommend increasing the domestic market for high-end phones by reducing tariffs, which will shift the supporting ecosystem (including after sales) to India more strongly. “
The association emphasized that a stable tariff regime for inputs is important, as stability is paramount for the industry. ICEA said that changing tariffs for inputs on a frequent basis makes it difficult for manufacturers to operate in a viable manner.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
featured video of the day
Spotify plans layoffs this week