Made in India Phones to get costlier soon; Find why

The cost of mobile phones in India could increase soon. India's main excise tax has issued an order saying that further customs duty charges will be applied depending on the inputs used in mobile phones. If a higher cost is applied to components used for phones, OEMs could pass the additional cost on to consumers. Here is all you need to know.

As per a PTI report, the import of smartphone display assemblies and backing frames will receive a 10 per cent basic customs duty slap. But, if the antenna pin, power keys and other components are imported together with the display assembly, then the customs duty charge will increase by 5 per cent, and the total cost will be 15 per cent, as per the Central Board of Indirect Taxes and Customs (CBIC).

The CBIC said, "If any other item like the sim tray, antenna pin, speaker net, power key, slider switch, battery compartment, Flexible Printed Circuits (FPCs) for volume, power, sensors, speakers, fingerprint etc., come fitted along with a display assembly with or without a back support frame of metal/plastic, then the whole assembly attracts a BCD rate of 15 per cent."

CBIC says that if the display assembly consists of additional components, it will be considered a violation of the exemption notice. On the other hand, the industry says that all the parts attached to display content on a mobile phone should be considered display assembly. Therefore, there should only be a 10 per cent customs duty charge, depending on the industry.

The Ministry of Electronics and Information Technology (MeitY) provides a detailed list of display assemblies to understand it easily. The display assembly is an accumulation of the components and sub-components of a cell phone. A mobile screen assembly consists of the following things: a touch panel, cover glass, gloss enhancement film, indicator guide light, reflector, LED backlight, polarizers, and LCD controller mounted on a flexible printed circuit (FPC), among others.

Chinese companies like Vivo and Oppo have allegedly received tax avoidance notices. Tech companies say this happened because there was a lack of clarity about customs duty charges on key cell phone components.