In a move to boost local manufacturing of mobile phones and tablets, the government on Saturday increased duty benefits for domestic producers of these electronic items.
Excise duty structure for mobiles handsets, including cell phones, is being changed to 1 per cent without CENVAT credit or 12.5 per cent with CENVAT credit, Finance Minister Arun Jaitley said.
Earlier, the duty structure for mobiles was 6 per cent with CENVAT credit.
For tablet computers, the duty structure is “2 per cent without CENVAT credit or 12.5 per cent with CENVAT credit.”
“Manufacturer or producer of final product is allowed to take CENVAT credit. This would encourage local manufacturing rather then import,” IESA chairman Ashok Chandak said.
Local manufacturer can claim duty benefits on VAT paid on purchase of various input materials.
The increase in CENVAT credit will give benefit to domestic manufacturers against those importing such items.
The Minister also announced to exempt “parts, components and accessories, falling under any chapter, for use in the manufacture of tablet computers and their subparts for use in manufacture of parts, components and accessories, ” from “BCD (basic custom duty), CVD and SAD.
“All goods except populated PCBs, falling under any Chapter of the Customs Tariff, for use in manufacture of ITA bound goods from 4 per cent to nil,” Mr. Jaitley said.
Indian Cellular Association national president Pankaj Mohindroo said that government’s announcement on CENVAT leads to increase countervailing duty on imports to 12.5 per cent on imposed on imported mobile and tablets, which is going to make strong case for manufacturing within country.
