Television sets to get expensive from October 1 with 5 per cent customs duty on import of open cell

Televisions sets will get expensive from October 1 as the government is set to reimpose 5 per cent customs duty on the import of open cell for TVs. The same duty was applicable on open cell earlier as well but the government had decided to give one year exemption to makers, allowing them time to build capacity. The exemption period will end on September 30 and there are no plans to further extend it. Open cell remains to be a key component for television makers.  

“No real manufacturing growth of television could happen unless Open Cell is domestically made. The present activity carried out by the industry is only of assembly of television after importing most of the parts,” a finance ministry source told PTI.  

Imports to get expensive 

The move is believed to be elemental to the Phased Manufacturing Plan (PMP) of television and its components to bring the industry out of mere television assembling while being totally dependent on imports for all its parts. 

Till last year televisions worth Rs 7,000 crore were being imported. The government has supported the television industry through custom duty structure. A customs duty of 20 per cent has been imposed on imports of television since December 2017. 

Television import has also been put on the restricted category with effect from July end this year. Television manufacturers are enjoying full reasonable protection from imports. 

“Basic customs duty exemption on import of open cell for manufacturing television panels was introduced last year (applicable till September 2020)  to boost local manufacturing of television in India. Now, the focus seems to build capacity for manufacturing of television components in India. Discontinuation of exemption is a measure towards import substitution and promotion of domestic manufacturing,” Saloni Roy, senior director, Deloitte India explained. 

Immediate prices to go up 

While the move aims to boost local manufacturing and make televisions affordable, the prices are likely to go up as an immediate impact. The prices may go up by a minimum of Rs 600 for a 32-inch television and Rs 1,200-1,500 for a 42 inch TV and even higher for a large screen television. 

Off late the prices of open-cell have increased rapidly from the supply end with also extreme shortage in its availability, Arjun Bajaaj, Director- Videotex International Private Limited said, while explaining that this price hike in open-cell has already led to an increase in TV prices which would further increase after the 5% import duty is implemented.  

“We support the government initiative of making Indian a manufacturing hub but such duties on Open Cell should come in place once the manufacturing starts in India which requires a huge amount of investment,” he said. 

The leading brands are believed to import Open Cell for a basic price of Rs 2,700 for a 32-inch and about Rs 4,000 to Rs 4,500 for a 42-inch television.