Tax Authority Clarifies Tariffs on Mobile Phone Inputs, Big Relief for Industry, Telecom News, ET Telecom

New Delhi (Reuters) – India’s top indirect tax body issued detailed guidelines on Friday, clarifying the levy of customs duties on various inputs used in mobile phones.

Importation of cell phone display assembly together with back support frames will incur Basic Customs Duty (BCD) at the rate of 10%.

But if other items such as antenna pin and power keys are imported together with the display assembly, the entire assembly will be subject to 15% duty, the Central Board said. Indirect Taxes and Customs (CBIC).

The circular follows the Department of Tax Intelligence (DRI) show cause notification to Chinese smartphone majors Oppo and Vivo regarding alleged tax evasion.

Handset makers have argued that the customs evasion charges were due to a lack of clarity on how tariffs are levied on key cell phone components.

According to the CBIC, the display assembly only includes the screen, and if the imported product includes any other component, it will be a violation of the exemption notification.

The industry argued that all components that are attached to the display of content in a mobile phone will be considered a display assembly, attracting a 10% lower duty.

The circular is in line with clarification issued by the Ministry of Electronics and Information Technology (MeitY) and provides a detailed list of display assemblies along with images for easy identification and evaluation.

Experts say the circular would help avoid unnecessary disputes due to any misdeclaration of products at the time of import.

“This clarification brings certainty of taxation to mobile phone manufacturers for future imports who have long been at odds with customs officials over determining the appropriate BCD rate for display assembly modules,” said Saurabh Agarwal, tax partner. , EY.

A letter from MeitY to the Department of Revenue in March this year highlighted apparent differences in the levying of customs duties on a key component of cellphones, the touchscreen or protective glass.

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