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 percent, from 10 percent 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 percent.
According to Pratik Jain, Leader – Indirect Tax, PwC India “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 percent to 15 percent or 20 percent,”. “This seems to be with the twin objective of increasing revenue as well as to encourage more manufacturing and value addition in India.”
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.”
