Industry Seeks Deferment of Proposed Customs Duty Hike on Mobile Components

The government has proposed import duty on LCD assembly, touch panel and vibrator motor, to be imposed later this year under the phased manufacturing plan (PMP)

The government’s plan to hike customs duty on certain mobile phone components may lead to distress in the industry and impact around 100 mobile phone assembly units in the country.

As many as 100 out of 127 mobile phone assembly units could be closed down if the government increases the customs duty on the mobile phone components, as per the report in a leading Indian daily.

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Therefore, the apex body of mobile industry India Cellular Electronic Association (ICEA) has written to the government seeking the postponement of hike in the customs duty to next year.

The government has proposed import duty on LCD assembly, touch panel and vibrator motor, to be imposed later this year under the phased manufacturing plan (PMP). The import of these parts is scheduled to attract countervailing duty (CVD) of 12.5 per cent and 1 per cent excise duty without input tax credit.

Deep distress in the industry 

Pankaj Mohindroo, President, ICEA, in a letter written to Nripendra Misra, Principal Secretary to the Prime Minister in December 2018, said that there is a deep distress in the industry, primarily in the mobile manufacturing ecosystem that comprises more than 100 of the 127 factories. It will not be practical to impose extra cost on the ecosystem, it

The major reason for PMP was to discourage imports of more components every year in order to make manufacturing an attractive option in the country.

The PMP is an integral part of the ambitious Make in India initiative of the government of India, which aims to make India self-sufficient in electronic hardware manufacturing as well as hopes to make the country a global hub for manufacturing by 2025.

ICEA said that the mobile manufacturing in India has crossed the target of Rs 50,000 crore that is originally set to be achieved by March 2020, despite the lack of development in the 2017 PMP components.

According to the letter, the industry would be able to achieve Rs 70,000 crore worth of revenue in the current financial year ending March 31.