Budget 2018-19 is expected to bring with it a little custom duty rejig. While that’s a good thing for the Make in India initiative, that may not be good news for the products that are imported into the country. That not only stands true for some smartphones like Apple iPhones and Samsung Galaxies, but also on on components such as printed circuit boards, camera modules, and displays that are allowed duty free entry now.
According to ET, the custom duty rejig is part of a broader customs revamp, which is also expected to address inverted duty structures – finished goods facing lower duty than the inputs that go into them. The idea behind the rejig is to encourage more companies, especially for electronics, to start manufacturing in the country, instead of just assembling their devices here.
Contradicting the policy, the ET report also mentions that some tax experts are questioning how effective would this move prove to be considering the free trade agreements offer customs duty exemption. On July 1, 2017, the government imposed basic customs duty on mobile phones at the rate of ten percent and subsequently raised it to 15 percent on December 14, 2017.
Pankaj Mohindroo, Founder and National President of the Indian Cellular Association, had said back then, “Indian mobile phone industry is marching towards global competitiveness. It does not seek long-term protection. Short-term disability mitigation is however necessary. The recent spurt in imports esp features phones (after PMP 1/7/2017 notifications) is responsible for this duty increase.”
Besides the custom duty on mobile phones, the duty on television and microwave ovens had also increased from 10 percent to 20 percent last December. Even customs on video recording equipment and television cameras had gone up from 10 percent to 15 percent.