Customs Duty on Open Cell for TV may Revert to 5% after Lapse of Exemption on 1 Oct

Import duty at the rate of 5 per cent on Open Cell, a key component in TV manufacturing, will resume from October 1, said the Finance Ministry on Sunday, 20 September 2020. The Government had given one-year exemption from custom duty to help domestic companies develop capacity to make TVs based on zero duty open cell.

The resumption of Open Cell duty may not result in domestic manufacture. It will further hurt TV manufacture in the country even though ban on TV import is in place. ICEA, the industry body of electronics has demanded extension of the exemption.

Some industry players have in the past also pointed out that with the price of fully-built panel increasing by 50 per cent, the imposition of customs duty on Open Cell, would increase prices of TVs by about 4 per cent move ranging from ₹600 for a 32 inch television to ₹1,200-1,500 for a 42 inch TV and more for bigger TVs.

However, officials said Open Cell is being imported for a basic price of ₹2,700 for a 32-inch TV and about ₹4,000- 4,500 for a 42-inch television. The impact of 5 per cent duty on Open Cell would, thus, not be more than ₹150-250 for a television.

‘For local manufacture’

According to officials, the sop was offered for a limited period of one year in anticipation that the industry would build capacity for manufacturing critical components in India.

TV sets worth ₹7,000 crore were imported last year. The government imposed 20 per cent import duty on TV sets to help domestic companies. TV set import has also been put on the restricted category effective July-end.

Avneet Singh Marwah, Director & CEO, SPPL, said with this move of the government, India will become a country paying one of the highest duties and taxes on TVs in the world. “Panel prices have been increased by 120 per cent in China, now with the imposition of 5 per cent custom duties on open cell, customers will be adversely impacted as brands will need to increase prices. The impact on customer price due to custom duty increase could be in the range of ₹400-1200, depending on the size,” he added.