Economy

5% Customs duty back on key TV component from Oct 1

Our Bureau New Delhi | Updated on September 20, 2020 Published on September 20, 2020

Imposition of customs duty on open cell, may increase prices of TVs by about 4%, says industry

Import duty at the rate of 5 per cent on Open Cell, a key component in TV manufacturing, will resume from October 1, said the Finance Ministry on Sunday. The Government had given one-year exemption from custom duty to help domestic companies develop capacity to make the component.

Stating that currently there are no domestic manufacturers of open cell, industry players have been urging for the duty exemption to be extended beyond September 2020, to curb the rise in LED TV imports. Some industry players have in the past also pointed out that with the price of fully-built panel increasing by 50 per cent, the imposition of customs duty on Open Cell, would increase prices of TVs by about 4 per cent ranging from ₹600 for a 32 inch television to ₹1,200-1,500 for a 42 inch TV and more for bigger TVs.

However, officials said Open Cell is being imported for a basic price of ₹2,700 for a 32-inch TV and about ₹4,000- 4,500 for a 42-inch television. The impact of 5 per cent duty on Open Cell would, thus, not be more than ₹150-250 for a television.

‘For local manufacture’

“This move (resumption of duty) is elemental to the Phased Manufacturing Plan (PMP) of television and its components to bring the television industry out of the crutch-walking (mere assembling of fully-imported parts),” a senior Finance Ministry official said.

According to officials, the sop was offered for a limited period of one year in anticipation that the industry would build capacity for manufacturing critical components in India.

TV sets worth ₹7,000 crore were imported last year. The government imposed 20 per cent import dutyon TV sets to help domestic companies. TV set import has also been put on the restricted category effective July-end.

“Newly imposed restriction puts a curb on import of TVs. This market would now be available to domestic manufacturers. This seems to be the reason for domestic manufacturers trying to resort to price increase.

Reintroduction of duty on Open Cell appears only an excuse,” another official said.

Pankaj Mohindroo, Chairman, India Cellular & Electronics Association said, “ICEA has requested that in the interest of the industry, which is facing a very challenging situation due to the pandemic, we should not add any cost especially in the middle of the festival season."

Avneet Singh Marwah, Director & CEO, SPPL, said with this move of the government, India will become a country paying one of the highest duties and taxes on TVs in the world. “Panel prices have been increased by 120 per cent in China, now with the imposition of 5 per cent custom duties on open cell, customers will be adversely impacted as brands will need to increase prices. The impact on customer price due to custom duty increase could be in the range of ₹400-1200, depending on the size,” he added.

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Published on September 20, 2020
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