Scatmag.com

November 2018

IMPORT DUTY DOUBLED ON TELECOM EQUIPMENT

DUTY DOUBLED

With effect from 12 October 2018, the government doubled the Basic Customs Duty on select telecom equipment.

Basic Customs Duty has been hiked from 10% to 20% for items in Chapter 85, items 85.17.61.00 and 85.17.69.90.

Basic Customs Duty levied cannot be adjusted / offset against GST. It can only be offset against CVD.


IMPORT CURB

The duty hike was introduced to curb outflow of foreign exchange & encourage local manufacturing.

This was the second round of duty increase in 2 weeks to cut down "non-essential" imports and save precious foreign exchange. The rupee has plunged over 15% against the US dollar, making it the worst performing Asian currency so far in 2018.

The hike 2 weeks earlier was on air conditioners, washing machines, refrigerators, textiles and diamonds. Those measures were, however, seen to be meagre as the value of these imports were estimated at a little over $12 billion. Further, these imports may now come in via Korea & Vietnam - countries with which India has free trade agreements.

According to TRAI data, India's telecom equipment imports were estimated at close to $22 billion during the last financial year, compared to $88 billion for oil imports.








AFFECTED ITEMS

The government increased basic customs duty to 20% on base stations, optical transport gear, IP radios, MIMO/ 4G LTE products, VoIP phones, media gateways, gateway controllers, carrier ethernet switches, packet transport nodes and a mix of packet optical transport products & switches.

Printed circuit board assemblies used for these will attract 10% duty.

Import duty on mobile phones had been increased earlier.


TELCOS TO LOSE 6,000 CR

As a result, telcos like Vodafone Idea, Bharti Airtel and Reliance Jio Infocomm will have to pay at least $750-800 million more n