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Mobile phones priced over Rs 2,000 to become expensive, attract 6 percent excise duty

This rise of 5 percent, from last year’s 1 percent excise duty, will specially impact the entry-level and the mid-range phones where companies normally do a lot of cost-cutting on different aspe

Mobile phones would be getting more expensive this fiscal year, especially those that cost more than Rs 2,000 as they will now attract an excise duty of 6 percent. Finance Minister P Chidambram made the announcement while tabling the annual budget in the Parliament today.

This rise of 5 percent, from last year’s 1 percent excise duty, will specially impact the entry-level and the mid-range phones where companies normally do a lot of cost-cutting on different aspects of the phone to keep the final price of the device down.

This move will especially hurt companies like Nokia and Samsung that manufacture most of their entry-level phones in India. With import duties on phones remaining unchanged, it would give an advantage to vendors like Micromax, Lava, Karbonn among others that import their phones from China without having any local manufacturing.

As we have reported before, if you have queries on any aspect of this year’s budget you can ask the Finance Minister directly on March 4 at a Google+ Hangout. Alternatively, before March 4, you can also post questions by uploading a video or commenting on the YouTube channel, through the Google India +Page and tagging text or a video with the hashtag #askthefm.

Image Credit: Reuters