The government is set to slap a customs duty of at least 10 per cent on imported mobile phones under the GST regime as it plans to retain benefits accorded to local manufacturing in line with the ambitious electronics manufacturing and ‘Make in India’ programme.
The duty can be notified later this week and could help address concerns of local manufacturers who have been worried about losing the edge they have enjoyed against imports.
According to TOI, the move may not result in any increase in prices of imported smartphones, but will surely prompt some of the fence-sitters to look at a more engaged and exhaustive manufacturing set-up within India.
Companies such as Apple, while starting local sourcing in partnership with Taiwanese manufacturer Wistron (that assembles the iPhone SE at Bangalore), still import a large chunk of the requirements for what is sold here. Many Chinese companies, including Lenovo-Motorola and OnePlus, are also sourcing a substantial part of their India requirements through the import route.
The government had built up the duty differential between local assembly manufacturing against imports around two years back in line with its plan to encourage electronics manufacturing and `Make in India’ programme. It currently levies a 12.5 percent countervailing duty on fully-made phones imported into India and a similar rate of duty on batteries, chargers and headsets of mobile phones. he government on Monday deferred the plan to get e-commerce companies to collect taxes from vendors and also did away with the need for government departments to deduct taxes from suppliers while paying GST in what is seen as the latest relaxation to help businesses transition smoothly to the new regime from Saturday.
