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Mobiles, TV cameras to be dearer as Budget proposes custom duty hike

Decision aims to boost local manufacturing under Make In India initiative.

New Delhi: In a bid to give further impetus to domestic manufacturing, finance minister Nirmala Sitharaman on Monday proposed a number of changes in the basic custom duty applicable on various electronic products as part of the Union Budget 2021-22.

Custom duty has been hiked by five to ten per cent on imported mobile phones which can jack up their prices by at least two per cent. The government has also decided to re-impose a ten per cent service welfare cess on imported handsets over and above the existing 20 per cent basic customs duty. Mobile phones were earlier exempted from this welfare cess.

Apart from this, it has also proposed an increase in duty on chargers from 15 per cent to 20 per cent, motherboard from 10 per cent to 20 per cent and from nil to 2.5 per cent for other components used in manufacturing of mobile phones.

"Under Make in India initiative, well laid out customs duty rates were pre-announced for items like mobile phones, electric vehicles and their components. This has ensured gradual increase in domestic value addition capacity in India. Customs duty rates are being revised on electric vehicles, and parts of mobiles as part of such carefully conceived phased manufacturing plans,” said Sitharaman while presenting the budget in the Parliament.

The import duty has also been raised for television cameras, digital cameras and video camera recorders by 20 per cent. Photosensitive semiconductor devices including photovoltaic cells, whether or not assembled in modules or made up into panels, and LED light sources will also see an increase of 20 per cent in duty. Photovoltaic DC generators will be dearer with an additional 10 per cent import duty being levied on them. The duty has also gone up for flat panel display modules, including OLEDs by 20 per cent.

The Centre has announced that it will come up with a new scheme to encourage domestic manufacturing of mobile phones, electronic equipment and semiconductor packaging in order to make India a part of the global manufacturing chain and boost employment opportunities. According to government’s data, electronics manufacturing in India grew from Rs 1,90,366 crore in 2014 to Rs 4,58,000 crore in 2018.

Additionally, the budget has also proposed a hike in import duty on mobile base stations by 10 per cent. This is likely to raise the cost of  deployment of telecom network in the country as over 90 per cent of telecom network gears are currently imported.

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