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DRI clarifies 10% import duty on component imports, providing significant relief to industry

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In Short:

Department of Revenue Intelligence (DRI) clarified that input components attached to mobile phone display assembly will attract a 10% import duty rate, resolving confusion existing for over four years. Industry body ICEA lauds the decision, thanking Ministry of Electronics & IT and PMO. DRI’s notice brings an end to confusion among manufacturers and customs officers. Earlier, Chinese smartphone makers faced penalties due to the unclear duty calculations. MeitY highlighted the ambiguity, leading to resolution.

Clarification on Import Duty for Mobile Phone Components

The Department of Revenue Intelligence (DRI) has clarified that input components attached to display assembly of a mobile phone shall attract a combined import duty of 10%, resolving ambiguity surrounding duty calculations for over four years.

Key Clarifications by DRI

The DRI specified that certain components like SIM Socket, SIM Tray, Antenna Pin, and Side Keys attached to display assembly kits will be considered as part of a cellular mobile phone display assembly. Thus, a 10% BCD rate will be applied on the entire integrated assembly.

Chairman of the India Cellular and Electronics Association (ICEA), Pankaj Mohindroo, appreciated the resolution, stating that it will prevent unnecessary litigation in the industry. He also acknowledged the Ministry of Electronics & IT and the Prime Minister’s Office for their support in resolving the issue.

Resolution of Confusion

The notice from DRI brings an end to confusion among mobile phone manufacturers, customs officers, and the electronics & IT ministry, dating back to 2020 when a 10% basic customs duty was imposed on display assemblies.

Earlier in 2022, Chinese smartphone makers Vivo, Oppo, and Xiaomi India faced show cause notices demanding a penalty of Rs 7259 crore, which was contested in court.

Industry Support

A letter from the Ministry of Electronics and Information Technology (MeitY) to DRI in March 2022 highlighted discrepancies in customs duty levies on touch panels or cover glass, aligning with industry demands.

MeitY emphasized that interpretation challenges were leading to unnecessary litigation and hindering the growth of mobile phone manufacturing in the country.

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