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The government has decided to impose 5 per cent basic customs duty on certain parts used for manufacturing of open cells for LED and LCD TVs. These include chip on film, printed circuit board assembly (PCBA) and cell (glass board/substrata).
This comes close on the heels of the government’s decision to re-impose 5 per cent duty on open cell TV panel imports.
Last year, the government had decided to scrap 5 per cent custom duty on open cell panel TV imports and components used to manufacture open cells which include chip on film, printed circuit board assembly and cell (glass board/substrate).
This duty exemption for a year was given so that the industry could move towards value addition instead of mere assembling and development of manufacturing capacity for critical components.
The latest move of reimposing custom duty on components is also expected to address concerns expressed by the industry earlier on the need to remove the anomaly in differentiation of Open Cell with bonding and Open Cell without bonding (Pure Cell).
Abhishek Jain, Tax Partner, EY said, “The government recently categorised TVs as a restricted item for import purposes, and have now increased the customs duty on specified components used in the manufacture of open cell used in LED/ LCD TV panels from Nil to 5 per cent clearly conveying their intention that the value addition in respect of LED/ LCD manufacturing should be centered in India, in line with the phased manufacturing programme.”
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