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    CBIC Clarifies 10% Import Duty on Mobile Display Assemblies: Here’s what qualifies as a display assembly

    We missed this earlier: The Central Board of Indirect Taxes and Customs (CBIC) stated that the import duty for the components making up the display assembly of a cellular mobile phone will have a 10% concessional basic customs duty in a circular released on June 7, 2024. The components making up the display assembly include:

    1. Touch Panel 
    2.  Cover Glass 
    3. Brightness Enhancement Film 
    4. Indicator Guide Light 
    5. Reflector 
    6. LED Backlight 
    7. Polarizers        
    8. Mounted OLED / LCD Driver IC for Display 
    9. FPCs/FPCAs (flexible printed circuit board assembly) fabricated, embedded, fitted, or attached to the display. 
    10. LCM (Liquid Crystal Module or LCD Module) [which consists of LCD (Liquid Crystal Display) Cell / pure Cell, FOG (FPC on Glass), or COG (Chip on Glass)] or OLED Module 
    11. Sensor(s) which are integral parts of the display, e.g. Fingerprint Sensor, Touch Sensor, which have been fabricated, embedded, fitted or attached in the display assembly at the time of assembly/manufacturing of display assembly 

    The CBIC also clarified that if the display assembly is imported with the following components fitted or attached to the assembly, then they should attract a 10% import duty as well— 

    • SIM socket 
    • SIM tray
    • frame/support structure
    • receiver mesh/speaker net
    • Foam, sticker, protective film, mylar, conductive cloth
    • side keys like the power button
    • antenna pin

    The authority mentions that the display assembly can also be imported without these components fitted with it. It added that if these components are imported individually, they will attract separate customs rates. 

    While these additional components, when fitted with the display, attract 10% import, the same isn’t true for all mobile components. The authority also stated that other mobile components, such as the battery pack, wired headset, and main lens for feature phones, would continue to attract separate import rates even if they come fitted with the display. 

    Why was this circular put out?

    This clarification is meant to resolve interpretational issues faced by the industry regarding the applicability of the concessional duty rate on Display Assemblies. CBIC explains that while circulars (one from 2022 and another from January 2024) have previously been released to explain the same, the Ministry of Electronics and Information Technology (MeitY) highlighted that the confusion around what constitutes display assembly has persisted. 

    To provide more clarity, MeitY requested the Department of Revenue to re-examine the interpretation by considering a revised list of included/excluded items for display assemblies. A committee with officials from MeitY and CBIC was formed to recommend principles for determining a display assembly eligible for the 10% concessional duty.

    Indian government’s attempt to encourage smartphone manufacturing: 

    With the decrease in import costs, the cost of manufacturing mobile phones will also decrease. This could, in turn, make phones cheaper for customers. Besides this, the government has also been attempting to encourage smartphone manufacturing. In 2020, it rolled out a product-linked incentive (PLI) for large electronics that also covered mobile phone manufacturing. Under it, the government provided companies with an incentive of 4% to 6% on incremental sales (over base year) of mobile phones manufactured in India. 

    Also read:

    The post CBIC Clarifies 10% Import Duty on Mobile Display Assemblies: Here’s what qualifies as a display assembly appeared first on MEDIANAMA.

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