Handset makers cheer as govt rationalises duties

Mobile phone makers have expressed satisfaction as the government has rationalised duty the structure on components, reducing the incidence of taxes to 12.5 per cent against the 29.44 per cent proposed in the budget.

"The Budget 2016 proposals had resulted in duty structure with high duty of 29.441 per cent on key parts like batteries, chargers and headsets compared to complete mobiles which were at low duty of 12.50," Indian Cellular Association National President Pankaj Mohindroo said in a statement.

The government has removed basic customs duty (10 per cent) and special additional duty (4 per cent) proposed on charger, adaptor, batteries and wired headsets.

"The quick correction of course by the government after the Budget will create the ecosystem for mass manufacturing of both mobile phones and parts in a balanced way," Foxconn country head and managing director Josh Foulger said.

He is also co-chairman of the Fast Track Task Force panel constituted by the government to promote manufacturing of mobile devices in the country.

The government has retained countervailing duty of 12.5 per cent on these components.

"With these amendments, the hurdles on mobile manufacturers have been removed. The road is now clear for manufacture of both smart phones and relatively low value feature phones for the common man," Lava International chairman and managing director Hari Om Rai said.

The government has also removed the SAD of 2 per cent applicable on populated printed circuit board for the manufacture of mobile phones.

As of now, the exemption of BCD, CVD and SAD on PCB in the pre-budget dispensation has been restored.

Tablet computers continues in the exception in case of PCBs which means that 2 per cent SAD only on PCBs for tablets continues, as envisaged in the Budget.