Industry welcomes resolution of ambiguity on display assembly for mobile phones

NEW DELHI — The electronics industry stakeholders on Friday welcomed the government’s move to resolve ambiguity around the customs duty on display assembly of mobile phones.

The India Cellular and Electronics Association (ICEA) said that the circular by the Department of Revenue on interpretation of display assembly based on recommendation of the Ministry of Electronics & IT will give a positive message to all investors – Indian and global.

Mobile manufacturing was the first to come forward and adopted a Phased Manufacturing Programme (PMP) to create the manufacturing capabilities and increase domestic value addition in the country.

As per the PMP, Basic Customs Duty (BCD) on Display assembly was imposed on October 1, 2020 and parts of display assembly remained exempted.

The latest circular resolves ambiguities and interpretation challenges for display assembly that have troubled the mobile industry for the past two years.

It provides a detailed list of parts and components — like touch panel, cover glass, brightness enhancement film, indicator guide light, reflector, LED backlight and polarizers, etc — that constitute a Display Assembly of a mobile phone and removing the ambiguity regarding the display assembly.

“If the following items are fabricated, embedded, fitted or attached with the display assembly of a cellular mobile phone, then the benefit of BCD treatment provided to display assembly would not be available to such assembly,” according to the circular.

“This circular is a big relief to the industry and will avoid unnecessary litigation. ICEA acknowledges the Ministry of Electronics & IT and Prime Minister’s Office for leading the way to find a resolution to this challenge,” said Pankaj Mohindroo, Chairman, ICEA.

“We also remain deeply appreciative that the Department of Revenue has acknowledged and understood the critical issue,” he added.

The move will help the country realise its dream of $500 billion manufacturing by 2030.