Display Panel and Touch Panel Duty Reverts to 10% as Exemption Notification Lapses, Phones to Cost More

(Schedule Rate 15% and Notification Rate 10%)

Smartphones and feature phones sold by Samsung, Apple, Vivo, Xiaomi, Oppo and RealMe will cost more as the government has imposed a 10% import duty on display and touch panels. The move is guided by the Atmanirbhar Bharat campaign as efforts to push manufacturing within the country gather pace. The actual impact of the duty comes at 11% due to an additional cess.

The price hike can range between 1.5% and 5%, companies said, adding that the move can hit demand ahead of the festive season, sources said. Display and touch panels are among the most critical components used in manufacturing of mobile phones and account for 15-25% of the cost of a device, depending on quality.

The government feels that “the time is right” to impose duty on display panels as this was one of the elements in the phased-manufacturing programme (PMP) earmarked for mobile phones, sources said.

This duty was originally slated to come into effect from April last year, but had been deferred twice as the government gave more time to component manufacturers to set up base in the country. At present, there are around four companies that are making display panels in the country, including Holitech and TCL.

Some of the companies said “prices can go up immediately”, while some are “looking to absorb as much as possible” to insulate consumers.

Pankaj Mohindroo, chairman of Indian Cellular and Electronics Association (ICEA), said the implementation of the duty “should have been rolled over because of exceptional circumstances” due to coronavirus.