Government Clarifies 10% Import Duty On Mobile Phone Display Assembly

The CBIC on Friday listed out parts or components, such as touch panel, cover glass, LED backlight, which constitute the display assembly of a mobile phone and will attract 10% import duty. It also said components, including frame, SIM tray, side keys like power/volume button, when fitted/attached to the display assembly, that integrated display assembly can be imported at the concessional 10% customs duty.

In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said currently a concessional basic custom duty (BCD) rate of 10% is imposed on display assembly for use in manufacture of a cellular mobile phone and a nil BCD rate on inputs or parts for use in manufacture of a display assembly for use in manufacture of a cellular mobile phone.

It said certain cases of misdeclaration by importers were intercepted by the Directorate of Revenue Intelligence (DRI) and other field formations and demand notices were issued in certain cases as well.

With the industry facing 'interpretational challenges' with regard to display assembly of cellular mobile phones, a committee constituted with officials from both CBIC and MeitY, recommended a principle that may be used to determine the interpretation of display assembly for extending the concessional BCD rate.

If the display assembly is imported with the items/components, including receiver mesh, speaker net, support frame, and antenna pin, which are fabricated, embedded, fitted or attached with the assembly, the whole integrated assembly should also be treated as a display assembly of a cellular mobile phone, attracting a BCD rate of 10%.

ICEA Chairman Pankaj Mohindroo said this circular is a big relief to the industry and will avoid unnecessary litigation.