The CBIC says smartphone display assemblies will attract a 15 percent import duty

The Central Board of Indirect Taxes and Customs has said that imports of mobile phone display assemblies with items like speakers, SIM tray, and power key are liable to 15 percent basic customs duty.

CBIC said there have been cases of misdeclaration when importing display assemblies. Currently, imports of inputs or parts separately for making a display assembly attract a 10 percent customs duty.The display assembly on a cellular phone consists of a touch panel, cover glass, LED backlight, and FPC.

All other items have a 15 percent BCD rate, including SIM trays, antenna pins, speaker nets, power keys, slider switches, battery compartments, flexible printed circuits, sensors, speakers, fingerprints, etc. Back support frame, either metal or plastic..'

'What needs to be assessed is how this will affect existing litigation since the additional BCD costs on past imports cannot be recovered from customers but only by manufacturers', Agarwal said.

Abhishek Jain, Partner Indirect Tax at KPMG in India, said: 'It is essential to ensure proper classification of Customs and no duty evasion during the PMP and Make In India programs.' It is also crucial to avoid hindering business operations through tedious investigations.

'The circular should clarify the classification of display assemblies, which has been an issue for the electronics industry in the past. Throughout the circular, a diagrammatic presentation is provided explaining.

To what extent integration will be considered at display assembly, and beyond that, as part of cellular devices? 'It will send a positive message to all global and Indian investors,' said the India Cellular & Electronics Association.

As a result of their interpretation, field formations began investigating most manufacturers. The ICEA took this up with the relevant authorities. 'I am confident that this clarification will put to rest all such challenges,' ICEA added.

As part of the initiative led by Electronics and IT Minister Ashwini Vaishnav, the industry body, whose members include Apple, Vivo, and Lava, called for a resolution to the problem that industry players faced in light of different interpretations made by different authorities.

' We are pleased that the Department of Revenue has acknowledged the views of MeitY on this critical issue in this circular, which will save the industry money and avoid unnecessary litigation,' ICEA Chairman Pankaj Mohindroo said.