Skip to main content

Centre raises duty on electronic items

Costly bite: The rise in tax to 15% on handsets is expected to make imports of iPhone models more expensive

Customs tariff increase covers mobile phones, TVs; move to lend a fillip to ‘Make in India’ programme



The Centre has increased customs duty on several electronic items including televisions, mobile phones and microwaves, making the import of these goods more expensive and thus lending a fillip to its ‘Make in India’ programme.
The custom duty on push button phones, including mobiles, and on smart electricity meters has been increased to 15%, from 10% now, as per a notification issued by the Ministry of Finance. The duty on products like monitors, projectors, water heaters, microwaves, TVs and lamps and light fittings has been doubled to 20%.
“This is a major policy shift from the Government, as the peak customs duty rate for many electronic products has effectively been increased from 10% to 15% or 20%,” said Pratik Jain, Leader - Indirect Tax, PwC India. “This seems to be with the twin objective of increasing revenue as well as to encourage more manufacturing and value addition in India.”
Mr. Jain said the duty increases had been made under “emergency powers” included in the customs laws, and could prompt manufacturers in other industry segments to push for similar protection from imports.
“Some announcements can be expected in the upcoming budget about these changes and policy direction in this regard,” he added.
Anwar Shirpurwala, Executive Director of MAIT, the IT hardware industry body, said the move was aimed at boosting domestic manufacturing and not at making products costlier. “There may be some impact on the prices of products that are imported... manufacturing infrastructure is being built in India and this move will help push it further.”
Likewise, Abhishek Jain, Tax Partner at EY India said, “To foster the national initiative of Make in India, the Government has raised the basic customs duty for various electronic products like mobile phones, microwave ovens, television sets, LED lamps, cameras. This would make import of these goods costlier and industry would be forced to explore domestic manufacture of these goods to reduce cost instead of importing these goods.”
Manish Sharma, President CEAMA and President and CEO, Panasonic India and South Asia said, “This shall not lead to major price hike as the duty structure for local manufacturing remains unchanged, but will boost indigenous manufacturing & generate more employment opportunities.”

‘Apple to be hit’

Meanwhile, Reuters reported that the rise in tax to 15% on handsets will make imports of phones — including most of Apple’s iPhone models — more expensive at a time the company’s revenue growth is slowing in India’s $10 billion smartphone market.
Pankaj Mohindroo, president of the Indian Cellular Association, said the increase will boost domestic manufacturers who are making about 500 million cellphones a year, more than double the output three years ago. Eight out of 10 phones sold in 2017 have been made locally, data from Counterpoint Research showed. Samsung assembles in India most of the handsets it sells in the country.
Apple currently only assembles its iPhone SE models in India and imports others. The company has sought a range of incentives and tax relief from the government for it to expand its manufacturing in India, but government officials have said they are unlikely to make exemptions for Apple.
Tarun Pathak, an associate director at Counterpoint Research, said the tax notification, will impact mobile phone companies dependent on imports.
“It will impact Apple the most as the company imports 88% of its devices into India. Either this will lead to increase in iPhone prices or force Apple to start assembling more in India.”
Aside from cellphones, the government also raised the import tax on video cameras to 15 % from 10 % and doubled the one on television sets 20 %, its statement said
On Monday, a delegation of Indian telecoms equipment manufacturers met Finance Minister Arun Jaitley, seeking government help to promote the domestic industry while he prepares the budget for 2018/19.
India’s goods imports in the seven months ending October rose 22 % to $256.4 billion from a year earlier, raising concerns among policymakers.



Comments

Post a Comment

Popular posts from this blog

Over 1 lakh illegal immigrants arrested in US in 2017

On January 25, Trump issued an executive order to set forth the Administration’s immigration enforcement and removal priorities. (Representational Image) The US authorities have arrested 143,470 illegal immigrants this year, according to a latest report. US Immigration and Customs Enforcement said in its annual report that it has made 143,470 administrative arrests in fiscal year 2017, increasing 30 per cent Year-on-Year, Xinhua news agency reported on Wednesday. An administrative arrest is the arrest of an alien for a civil violation of the immigration laws, which is subsequently adjudicated by an immigration judge or through other administrative processes. Of the total arrests, 110,568 occurred after January 20, which is a 42 per cent increase over the same time period last year, according to the report. US President Donald Trump took the oath of office on January 20 this year. On January 25, Trump issued an executive order to set forth the Administration’s immigrat...
Post a Comment
Read more

Canada debates new harassment legislation amid #MeToo storm

We can afford to do more for people who need it by doing less for people who don’t: Trudeau’s message (Photo Source: Reuters) Canada’s parliament began debate on Monday on new legislation to tighten workplace harassment rules, including those governing politicians, as allegations of sexual misconduct mounted against lawmakers on both sides of the political spectrum. The bill, introduced by Prime Minister Justin Trudeau’s Liberal government in November, gained a new prominence after a federal cabinet minister and two provincial party leaders stepped down last week after being accused of inappropriate behavior. While the proposed law will govern all federal workplaces, including private businesses, the environment among political staffers in Ottawa was in focus as the #MeToo social media movement gained momentum in Canada. “It clearly is a crisis in this workplace,” Employment Minister Patty Hajdu told reporters outside the House of Commons. “We talk a lot about getting wom...
Post a Comment
Read more

Trump administration drops Obama-era easing of marijuana prosecutions

The US Justice Department on Thursday rescinded an Obama administration policy that had eased enforcement of federal marijuana laws in states that legalized the drug, instead giving federal prosecutors wide latitude to pursue criminal charges. The action by Attorney General Jeff Sessions could have damaging consequences for the burgeoning marijuana industry in the six states including California and Colorado that have legalized the drug for recreational use, plus dozens of others that permit medicinal use. Justice Department officials declined to say whether they might take legal action against those states, saying further steps were “still under consideration.” Federal law still prohibits marijuana even as some states move to legalize it. White House spokeswoman Sarah Sanders said President Donald Trump’s top priority was enforcing federal law “whether it’s marijuana or immigration.” The policy change, detailed by Sessions in a one-page memo to federal prosecutors nationwid...
Post a Comment
Read more