The electronics industry stakeholders lauded the government’s resolution of the ambiguity surrounding customs duty on mobile phone display assemblies. The India Cellular and Electronics Association (ICEA) commended the Department of Revenue’s circular, based on recommendations from the Ministry of Electronics & IT, as a positive signal to both domestic and global investors.
Mobile manufacturing in India, pioneering the Phased Manufacturing Programme (PMP), has been pivotal in enhancing manufacturing capabilities and boosting domestic value addition. Under the PMP, a Basic Customs Duty (BCD) on display assemblies was imposed on October 1, 2020, while parts of the display assembly remained exempt.
The recent circular addresses longstanding ambiguities and interpretation issues regarding the display assembly, which have posed challenges to the mobile industry for the past two years. It delineates a comprehensive list of parts and components, including touch panels, cover glass, brightness enhancement films, indicator guide lights, reflectors, LED backlights, and polarizers, that comprise a display assembly for mobile phones, thereby clarifying the scope of the BCD.
“If the specified items are fabricated, embedded, fitted, or attached to the display assembly of a mobile phone, the benefit of the BCD treatment provided to the display assembly will not apply to such assemblies”, the circular states.
“This circular is a significant relief for the industry, eliminating unnecessary litigation. ICEA acknowledges the Ministry of Electronics & IT and the Prime Minister’s Office for spearheading the resolution of this issue”, said Pankaj Mohindroo, Chairman of ICEA. “We also deeply appreciate the Department of Revenue's recognition and understanding of this critical issue”, he added.
This move is expected to propel India towards its goal of achieving $500 billion in manufacturing by 2030, bolstering the country’s position in the global electronics market.