Taking the policy of using import tariff to encourage domestic manufacturing a step further, the government on Wednesday imposed a 5% basic customs duty on key components used in production of television displays.
The Central Board of Indirect Taxes and Customs (CBIC) notified that a 5% basic customs duty will apply on imported components that are used in liquid crystal displays (LCDs) and light emitting diode (LED) television panels from Friday. The duty will apply on chips, printed circuit board assemblies and glass boards.
The move comes immediately after the union cabinet extended production incentives for 10 sectors including technology products aimed at encouraging local manufacturing. The Narendra Modi administration is using both tariffs and incentives to encourage investments into local manufacturing but officials have in the past reiterated that these temporary measures are taken while remaining committed to an open global economy.
The government recently categorised television sets as a restricted item for the purposes of imports and have now increased the customs duty on specified components used in manufacture of open cell used in LED or LCD panels from zero to 5%, clearly conveying their intention that the value addition in respect of LED and LCD manufacturing should be centered in India, in line with the phased manufacturing programme, said Abhishek Jain, Tax Partner, EY.
A 20% customs duty has been in place on television imports since December 2017 and television import has been put on the restricted category with effect from end of July this year. BCD represents the tariff protection offered to competing local products. –Live Mint