If you are planning to buy high-end smartphones then this news is for you, we say this as the Government is mulling to impose customs duty on imported handsets, which make them costlier by 5-10 percent.
According to a report by the ET, the ministry of electronics and information technology has secured the legal opinion from the attorney-general who has said that imposing customs duty on phones will not violate the Information Technology Agreement (ITA), an international pact which mandates signatory countries to allow duty-free imports of certain electronics products.
The report said that inter-ministerial panel has been set up by the Government to fix the rates.
Currently, 30 percent smartphones are imported in India mainly from China and Taiwan.
In the Union Budget 2016-17, the Centre introduced a duty of 29.441 per cent on the import of mobile chargers, batteries, wired headsets, and speakers to encourage local manufacturing. However, the duty has been reduced to 12.5 per cent on chargers, batteries and wired headsets, while the duty has been completely withdrawn on speakers.
"MEITY's initiative to impose an additional 5-10 percent customs duty on imported handsets is a welcoming step towards smartphone industry. It provides the necessary impetus at the same time motivates the local manufacturers to align themselves to governments 'Make in India' vision. Furthermore, it will boost the sentiments of the local players and provide a level playing field for all the manufacturers within the segment. The industry awaits on such positive stimulants to continue under the GST regime as well, " said Manish Sharma, President CEAMA.
In a similar context, Cupertino-based tech giant Apple was also seeking tax concessions, including lower import and manufacturing duties, and certain policy exemptions from the Government for setting up a manufacturing unit here in the country. However, the company and the government has not come up with a agreeable settlement yet.
Now, the way the Indian government is looking at increasing the import duties, Apple might have scare chance of getting what they had asked for.
Anyhow, chances are that we might see the surge in the smartphone prices this year. This is definitely going to affect the smartphone market and many other sectors like telecom.