Concessional rate of 10% customs duty to apply on mobile display assembly: CBIC

The CBIC circular also provides a list of goods consisting in display assembly along with the pictures and schematic representations as received from MeitY for ease of identification and assessment.

Concessional rate of 10% customs duty to apply on mobile display assembly: CBIC
“This clarification brings in the certainty of taxation to the mobile phone manufacturers for future imports who have been at loggerheads with Customs officials since long for determining appropriate BCD rate of Display Assembly modules,” said Saurabh Agarwal, Tax Partner, EY.

The Central Board of Indirect Taxes and Customs (CBIC) has clarified that the import of display assembly of cellular mobile phone along with back support frame of metal/ plastic will be eligible for concessional rate of customs duty (BCD) of 10%.

However, in cases wherein other items such as antenna pin, power key, slider switch, battery compartment, Flexible Printed Circuits (FPCs) for volume, etc. are imported along with display assembly (with or without back support frame of metal/plastic) the whole assembly will attract BCD at the normal rate of 15%. The circular is in line with the clarification issued by the Ministry of Electronics and Information Technology (MeitY) on the said issue.

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“This clarification brings in the certainty of taxation to the mobile phone manufacturers for future imports who have been at loggerheads with Customs officials since long for determining appropriate BCD rate of Display Assembly modules,” said Saurabh Agarwal, Tax Partner, EY.

What needs to be assessed is how would this unfold in the courts and impact the existing litigations as the additional BCD cost on past imports would not be recoverable from customers but would have to be borne by the manufacturer importers only, Agarwal said.

The CBIC circular also provides a list of goods consisting in display assembly along with the pictures and schematic representations as received from MeitY for ease of identification and assessment.

The circular will bring certainty in respect of eligibility of concessional rate of BCD in cases wherein other parts of mobile phones are imported along with display assembly. The proactive step by CBIC would help in avoiding unnecessary litigation on account of misdeclaration of products by taxpayers at the time of import, Agarwal added.

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