Handset makers urge DOT to drop import duty charges on 4G smartphones.

NEW DELHI: Handset makers have sought intervention of the telecom department (DoT) to ensure that 4G smartphone consignments imported into India are not charged basic custom duty (BCD) of 10 per cent, similar to that charged on 4G/LTE telecom equipment.

The Indian Cellular Association (ICA) that represents major phone brands like Samsung, Apple, Micromax, LG has written to DoT to clearly classify 4G phones and 4G/LTE telecom equipment, and their respective import duties, to custom authorities, such that the issue does not arise in future.

This, after Bengaluru customs about a fortnight ago attempted to levy 10 per cent BCD applicable to 4G gear imports also on 4G smartphones, on top of the applicable countervailing duty (CVD) of 12.5 per cent.

While the dispute at Bengaluru customs was resolved, ICA's effort is to make sure this wasn't repeated at other airports, Pankaj Mohindroo, president of the body, told ET.

"While the dispute on interpretation is currently limited at the Bengaluru customs range, we envisage the issue could sporadically emerge in other ports as well, considering that more than 60 per cent of the smartphones currently sold in the domestic market are having the 4G / LTE feature," the ICA has said in the letter to DoT. ET has seen a copy.

Bengaluru is considered among the second rung of ports for shipping in fully made phones, the topmost being Delhi and Mumbai. 4G phone imports will make up for about 75 per cent of Rs 40,000 crore worth of smartphones being imported into the country in 2016-17, up from about 50 per cent last year.

Another worry for the handset vendors is that the duty may be applied retrospectively — from July 2014 when the notification for LTE/4G telecom equipment attracting a 10 per cent BCD was issued — which could then possibly lead to legal tangles and penalties upwards of Rs 2,800 crore for the industry at large.

"We request the intervention of DoT to issue a technical clarification to customs to avoid the confusion on applicability of 10 per cent basic customs on LTE/4G telecom equipment and the non-applicability on mobile handset," the letter to DoT added.

Source : economictimes.indiatimes.com