New Delhi, Aug 19: Import of mobile phone display assembly equipped with items like speaker, SIM tray and power key will attract 15 per cent basic customs duty (BCD), Central Board of Indirect Taxes and Customs (CBIC). ) said. CBIC said that there have been cases of wrong declaration while importing display assembly of cellular mobile phones.
Currently, display assembly of mobile phones attracts 10 per cent customs duty, and zero duty on import of separate inputs or parts for manufacturing display assembly.
The display assembly of a cellular mobile phone consists of a touch panel, cover glass, LED backlight, FPC specifically required to provide display function and a brightness-enhancing film. CBIC in a circular sent to field offices has said that if the display assembly of mobile phone is imported with only metal/plastic back support frame, it will attract 10 per cent BCD.
However, a metal/plastic back support frame, if imported separately, will attract a BCD of 15 per cent. “If any other item like SIM tray, antenna pin, speaker net, power key, slider switch, battery compartment, flexible printed circuit (FPC) for volume, power, sensor, speaker, finger print etc. comes fitted with the display. Assemblies with or without a metal/plastic back support frame, the entire assembly attracts a BCD rate of 15 per cent,” the CBIC said.
CBIC clarified that such assemblies, including display assembly and any other parts, are not eligible for the benefit of concessional rate of 10 per cent BCD. EY India Tax partner Saurabh Agarwal said this clarification brings certainty of taxation for future imports for mobile phone manufacturers, who have long been at loggerheads with customs officials to determine the appropriate BCD rate of display assembly modules.
“There is a need to assess how this will unfold in the courts and affect the current litigation as the additional BCD cost (if any) on past imports will not be recovered from the customers, but only from the producer importers,” Agarwal said. Abhishek Jain, Partner, Indirect Taxes, KPMG in Agrawal India said: “Ensuring that customs classification is done appropriately and there is no duty evasion is the key to successful implementation of PMP and Make in India programme. important for.
Also, it is important to ensure that tedious investigations do not affect business operations. “This circular should provide sufficient clarity regarding the classification of display assemblies, which has been an issue in the past for the electronics industry.
The circular clearly states with a diagrammatic presentation the extent to which integration into display assembly shall be considered, and from what point it shall be considered as part of cellular devices.” Mobile device industry body India Cellular and Electronics Association (ICEA) Said that the circular will send a positive message to all investors – Indian and global investors.
The government had in 2016 notified a phased manufacturing program (PMP) for mobile phone manufacturing to create manufacturing capacities and enhance domestic value addition in the country. According to the PMP, the BCD on the display assembly was installed on October 1, 2020 and parts of the display assembly were exempted.
ICEA said that the Ministry of Electronics and IT (Meity) has also submitted a document to the Department of Revenue detailing the key components of the display assembly on which the BCD will be exempted. “However, Field Formation arrived at an interpretation that differed from the document and initiated investigations against most of the manufacturers. ICEA took up the issue with the relevant authorities.
This clarification, we hope, will set all such challenges to rest,” said ICEA. The industry body, whose members include Apple, Vivo, Lava etc., said Electronics and IT Minister Ashwini Vaishnav. The issue led to finding a solution to the challenge. The industry players were facing due to different interpretations by different authorities. “This circular is a great relief to the industry and will avoid unnecessary litigation.
We also deeply appreciate that the Department of Revenue has accepted the view of MeitY on this important issue,” said Pankaj Mohindroo, Chairman, ICEA.
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