Though Finance Minister Pranab Mukherjee on Friday announced full exemption from basic customs duty on LCD and LED TV panels, consumer electronics majors feel that it would not help much in bringing down prices of television sets. On the contrary, they feared that hike in excise duty from 10 to 12 per cent would lead to hike in the prices of other white goods like refrigerator, air-conditioners and washing machines.
“The Budget (2012-13) does not bring any relief to the consumer electronics industry, which has been reeling under the impact of rising input costs and rupee depreciation in recent times…the rise in excise duty may lead to an increase in prices of consumer electronics products,” said Samsung India Vice-President (Home Appliances) Mahesh Krishnan.
Similarly, Panasonic India Managing Director Manish Sharma said: “With an increase in excise duty, the appliances’ prices will go up by 3-4 per cent this fiscal year…for LCD and LED TVs, Panasonic is still quantifying the impact of increase in excise duty and the decrease in import duty on LCD panel to zero.” Notably, almost all major consumer electronics companies have increased prices of their products in recent months due to rising input costs and fluctuation in rupee-dollar exchange rate.
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On the other hand, LG India Managing Director and President South West Asia region Soon Kwon said: “While the raise in income tax exemption should provide some increase in disposable income for consumers, it will be offset by the hike in central excise duty.” Welcoming the custom duty exemption on LCD/LED panel, he, however, said: “It would only partly affect our costs.”
In a statement, Consumer Electronics and Appliances Manufacturers Association (CEAMA) President Anirudh Dhoot said: “In this Budget, we were expecting some relief from the government in terms of taxation, infrastructure set up, reduce customs duty, encourage domestic manufacturing especially set top boxes etc. However, not all of it has happened.” Mr. Dhoot, who is also Director of Videocon, said the increase of excise duty and service tax will straight away affect the end consumer.