Union Budget 2023: Electronic companies urge govt to reduce tariffs

Ahead of the Union Budget 2023-24, the electronic companies have urged the government to lower the tariffs on parts and components including printed circuit board assembly (PCBA), connectors, and mobile phone camera modules, reported Livemint.

Some duty structures, according to industry groups and stakeholders, need to be revised because they are now burdening the industry.

They asserted that these expenses are having an adverse effect on the industry’s capacity to reach production goals, which are necessary for the government’s “Make in India” push.

For instance, the India Cellular and Electronics Association (ICEA), an industry group backed by Foxconn and Apple among others, recommended that the existing tariffs of 2.75 per cent on parts, mobile phone components, and sub-assemblies be eliminated because they increase the burden on manufacturers and jeopardise the domestic industry.

The ICEA also pushed for lower import taxes on components used to make open cell panels for television production. Open cells are a crucial part of LCD panels, which are used to make TVs. Open cell components currently incur a 5 per cent basic customs tax in India.

Due to increased demand for larger displays and premium features in TVs, the average price of TVs in India increased 27 per cent from the year earlier in the first quarter of 2022, according to a Livemint report from June of last year.

Since more than 70 per cent of components are still imported, in part because of the high tax of 8.25 per cent on resins and other raw materials, the ICEA also urged a reduction in the duty on mechanics. Better coordination between the customs, income tax, and GST authorities is one of the demands made in order to ensure that taxes on royalties paid to foreign corporations by domestic electronics companies are taxed only once in accordance with the agreement between supplier and user.

Wearable brands, too, sought a reduction in duty on raw materials.