Mobile phones and tablets are becoming “the need” in almost everyone’s life. These devices, along with getting increased demand are also to become expensive in India as their excise duty gets increased. In this year’s Union Budget, the Indian government has planned to increase the import cost of mobiles and tablets from 6% (existing) to 12.5%. This increase could be mainly to support and help the domestic mobiles and tablets manufacturers like Lava, Celkon, Micromax, etc, predicts many of the industry insiders and analysts.
According to the Union Budget’s printed copy statement that was presented by Arun Jaitley, finance minister, mobile handsets including cellular phones are to get changed excise duty structure. The excise duty structure that was 1% without Cenvat credit or 6% with Cenvat credit is being changed to 1% without Cenvat credit or 12.5% with Cenvat credit and the 1% of NCCD on mobile handsets including cellular phone remains unaffected.
Also according to many analysts, it is being noted that the Budget has also paved way for a 4-5 percent increase in importing cost for those manufacturers who get handsets imported into India and this is to affect the consumers directly.
To explain in detail, when a phone priced Rs 10,000 is imported into India the total cost of the phone will also include the import cost which could be about Rs 6,000. Now with the Indian government’s proposal, the import cost is to get increased by another Rs 360 and this is to be charged from buyers – meaning the consumers need to pay more.
As per a statement revealed to Economic Times by Lava International that has a fine share in the Indian smartphone market, this change in the duty is to make its devices be price a bit more. According to Hari Om Rai, Chairman, co-founder and Managing Director, Lava devices might get a price hike of about 4-5% but decision on the exact increase and from when is yet to get finalized.
IDC that tracks the record of devices being imported on a quarterly basis revealed that handset manufactures such as Samsung, Micromax, Xiaomi, Lava, Intex and others have imported about 64.3 million devices during the October-December quarter.
So the conclusion on this excise duty hike is that consumers will have to pay more for purchasing their favorite mobiles and tablets. Also the 2015 Union Budget seems to have sourced a similar kind of impact on computers, mobile phone tariffs and digital products like camera and so on.
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