01.02.2023: Tax cut on mobile phones, TVs: Budget 2023 eases indirect taxes, slashes customs, excise to push manufacturing

FM Nirmala Sitharaman in Budget 2023 proposed basic customs, excise duty cuts on a range of products including mobile phone and television parts. Duty cuts have been announced on toys and bicycles as well easing indirect tax regime in a push to value added manufacturing in India. Finance Minister, Nirmala Sitharaman said, “The result of the various initiatives of the government, including phased manufacturing programs mobile production in India increased from 5.8 crore units valued at Rs 18,900 crore in 2014-15 to 31 crore units valued at Rs 2,75,000 crore in last financial year.

“Government will provide relief in customs duty on import of certain parts like camera lens and concession on import of lithium ion batteries to further promote mobile phone production in India,” said FM Sitharaman. In addition to reduction of custom duties on handset parts for production, the government will also boost television production in the country by reducing basic custom duties on parts of open cells of TV panels to 2.5%. The basic customs duty on electric kitchen chimneys is ramped up from 7.5% to 15%. BCD on compounded rubbers is being increased from 10% to 25% or 30 kg whichever is lower, FM added.

“Customs duty exemptions on import of capital goods and machinery required for manufacturing lithium ion cells for batteries used in electric vehicles to bring down cost of manufacturing of EV and provide much-needed impetus to the industry considering cost of battery being a major component of cost of electric vehicles,” said Himanshu Relan, Partner, Indirect tax.

“Proposed reduction in basic customs duty for electronic components for mobile phones, such as camera lens, etc., is in response to industry demand to reduce import duty on certain parts. This would further help Companies approved under PLI for mobile phones and large scale electronics to achieve sales targets under Production Linked Incentive Schemes,” said Nischal S Arora, Partner, Nangia Andersen LLP. Custom duty exemption on import for lithium ion battery to continue. “This is a continued focus on transition to electric mobility,” said Sudin Sabnis Partner Nangia Andersen LLP.

Source: https://www.financialexpress.com/budget/tax-cut-on-mobile-phones-tvs-budget-2023-eases-indirect-taxes-slashes-customs-excise-to-push-manufacturing-2967177/

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