The zero customs duty on open-cells for LCD/LED panels, used for televisions, may get a temporary extension. The government is studying a proposal to extend the nil duty by another 6 months.
Currently, this is valid till September 30, 2020. Imposition of customs duty would lead to an immediate hike in prices of televisions. This is because open-cell is what makes the LED/LED screen of a television function effectively. The entire open-cell component is imported from South-East Asian markets.
In September 2019, the Ministry of Finance had said the open-cells for LCD/LED panels will not attract any customs duty. It will be valid till September 30, 2020, post which local manufacturing of open-cell could be incentivized. In her Budget speech, Nirmala Sitharaman, finance minister, said that it has been observed that imports under Free Trade Agreements (FTAs) are on the rise.
Undue claims of FTA benefits have posed a threat to domestic industry. Such imports require stringent checks. In this context, suitable provisions are being incorporated in the Customs Act. In the coming months, the government shall review Rules of Origin requirements, particularly for certain sensitive items, to ensure that FTAs are aligned to the conscious direction of the policy, asserted the finance minister.
Televisions are also a category where FTAs are being used in a small way to source products/parts from outside. This will also be under review. She also said that the custom duty exemptions shall be comprehensively reviewed by September 2020 for taking a view on their relevance.