Buying a television set will soon become costlier as the 5 per cent customs duty on open-cell panels has been re-imposed from today (October 1). The Central Board of Indirect Taxes and Customs (CBIC) said in a notification that the zero customs duty for open-cell panels, valid between September 2019 and 2020, had come to an end on September 30.
Customer duty exemption was given last year to the industry as it had sought time to build domestic capacity for Open Cell, said a Finance Ministry source earlier this year while responding to a query whether the television sets are going to cost more from coming October as panel duty sop ends.
Ahead of the festive season, the custom duty re-imposition is likely to lead to an immediate price hike in televisions as open-cell panels are used in manufacturing LCD/LED screens for televisions. Note that TV panel prices are already on the rise since manufacturers increased prices by 20-25 per cent since September.
About 60 per cent of the price of the television is the cost of the open-cell panel that makes the screen. Government officials told ET in an earlier report that the price increase due to this duty will not be more than Rs 250 per Television set, dismissing claims of substantive price hikes being put forth by the industry.
Note that as per officials, leading brands import Open Cell for a basic price of Rs 2,700 for a 32 inch and about Rs 4,000 to Rs 4,500 for a 42-inch television. The impact of 5% duty on Open Cell would, thus, is not likely to be more than Rs 150-250 for a television. Television makers were hopeful of a temporary extension till the end of December, to see them through the festival season. However, no extension has been announced by the government.
It is worth mentioning that last year in September, the CBIC announced that there would not be any customs duty applicable on open-cell panels after requests from television makers. The body, however, clarified that manufacturers must work towards developing domestic manufacturing capacities. Despite the clarification, TV manufacturers were unable to set up local manufacturing capacities for panels in this one-year duration since the coronavirus outbreak and subsequent lockdown also hampered these plans.
For those who are not aware, the open-cell is a critical component in the manufacture of television sets and at present, there is no local manufacturing of open cells in the country which is why the entire component is imported from markets such as China. These raw open cells are imported and are then assembled in India.
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