The Central Board of Indirect taxes & Custom (CBIC) has said the Display Assembly of a mobile handset, imported with or without back support, will attract Basic Custom Duty (BCD) of 10 per cent. However, if it comes with various components, the rate of duty will be 15 per cent.
The Directorate of Revenue Intelligence (DRI) recently booked companies such as Vivo and Oppo on the issue of mis-declaration of certain items. In the case of Vivo India, DRI said mis-declaration resulted in wrongful availment of ineligible duty exemption benefits amounting to Rs 2,217 crore. Mis-declaration by Oppo resulted in wrongful availment of ineligible duty exemption benefits amounting to Rs 2,981 crore.
According to the circular, although the back support frame of metal/ plastic has no essential function in display and only provides strength, protection and structural stability, the mere attachment of a back support frame of metal/plastic on the display assembly does not alter the essential characteristic of display in any manner, and the assembly would continue to be treated as a Display Assembly of a cellular mobile phone. Therefore, “if display assembly of mobile phone is imported with merely a back support frame of metal/ plastic attached to it, the assembly continues to be a Display Assembly of a cellular mobile phone and a BCD rate of l0 per cent shall be applied,” it said. However, if the back support frame of metal/plastic is imported individually, it will attract a BCD rate of 15 per cent.
Also, if any other item including the sim tray, antenna pin, speaker net, power key, slider switch, battery compartment, Flexible Printed Circuits (FPCs) for volume, power, sensors, speakers, finger print, etc, come fitted with a Display Assembly, with or without a back support frame of metal/plastic, then the whole assembly attracts a BCD rate of 15 per cent, the circular said.
CBIC said though notification has been issued, there have been instances of mis-declaration. Also, the Ministry of Electronics and Information Technology (MeitY) shared a Technical Document that provided the prominent constituents of a Display Assembly of a cellular mobile phone, which was shared with field formations for ease of assessment.
The document states that the Display Assembly is an assembly of components and sub-components such as Touch Panel, Cover Glass, Brightness Enhancement Film, Indicator Guide Light, Reflector, LED Backlight, Polarizers, etc, which are put together to form a single assembly, having the principal function of displaying images and text.
Further, the Display Assembly may come with or without the back support frame of metal/ plastic. It suggested if the display assembly comes with additional parts such as mechanics or any other items, in the form of an assembly, the whole assembly is liable to attract BCD at the rate of 15 per cent. CBIC came out with the latest circular based on all the consultations.