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Government Exempts Customs Duty on 35 Capital Goods to Promote Local Production

According to a government notification, customs duty on products used for manufacturing mobile phones has been waived to support the growing industry

The government of India has relaxed customs duty on the imports of around 35 capital goods used in the production of mobile phones in India. According to a government notification, the decision was taken to boost the local mobile manufacturing segment in the country.

Items exempted from customs

The printed circuit board (commonly known as the motherboard) coating machine, printed circuit board (PCB) assembly loader, lithium-ion battery, speaker and receiver of mobile phones, data cables, optical fibre and a few more have been exempted from the customs duty.

Pankaj Mohindroo, ICEA National President, said that the basic duty on the 35 items, which currently ranges from 7.5 to 10 per cent, was fully exempted. He added that Integrated goods and services tax (IGST) would be applicable to the imports but this could be set off against the goods and services tax (GST).

The move has been made to support the domestic production of parts or components for mobile devices, speakers and receivers, data cables, optical cables, PCBs and printed circuit board assembly (PCBA), that have also been included in the phased manufacturing programme.

HS Code

Applauding the government’s decision of waiving import duty and promoting ‘Make in India’ initiative, the Indian Cellular and Electronics Association informed that all the 35 capital goods had HS Codes that are required for imports. These are also known as Indian Trade Clarification and are based on Harmonized System (HS) of coding, an international term used to classify traded goods on a common basis for customs purposes. The ICEA informed that the 35 machine parts had HS Codes at eight-digit tariff level that would further fasten the customs clearance process. At the international level, the Harmonized System (HS) for classifying goods usually has a six-digit code system.