With announcement of an increase in custom duty by up to 10 per cent on inputs and parts of mobile chargers and moderate hike in some sub-parts of phones in the Budget, industry body India Cellular and Electronics Association (ICEA) on Monday reported “widespread feeling of disappointment” in the proposals of duty hikes.
The Budget proposals announced by Finance Minister Nirmala Sitharaman are expected to make the handsets costlier by 3-4 per cent.
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In a letter addressed to Electronics & IT Secretary Ajay Prakash Sawhney, ICEA also said that the industry is “disappointed” on the non-reversal of Goods and Services Tax (GST) rate from 18 per cent to 12 per cent.
“There is a wide spread feeling of disappointment in the proposals of duty hikes in notifications 50/2017 and 57/2017 which have been scaled up from zero to 2.5 per cent and 10 per cent to 15 per cent in some cases,” ICEA Chairman Pankaj Mohindroo wrote in the letter.
“In some cases, like mechanics this will be a big setback and can collapse the developing mechanics industry vertical,” he said.
As per the Budget proposals, duty on inputs or parts for manufacture of connectors of cellular mobile phone will be increased from nil to 2.5 per cent.
Duty on inputs/parts/sub-parts for manufacture of camera modules has also been increased to 2.5 per cent from nil from April 1.
Similarly, duty on inputs or parts for manufacture of Printed Circuit Board Assembly (PCBA) of cellular mobile phone has been increased from nil to 2.5 per cent from April 1.
“The manufacture of intermediate goods between raw material and final products may also be affected due to increase in costs, the domestic manufacturing can have a setback in short run,” the ICEA said. (IANS)