CBIC clarifies on display assembly of mobile phones for levy of 10% import duty

CBIC has issued clarification on import duty for items used for the display screen in mobile phones

The CBIC on June June 7 listed out parts or components, such as touch panel, cover glass, and LED backlight, which constitute the display assembly of a mobile phone and will attract a 10% import duty. It also said components, including the frame, SIM tray, and side keys like power/volume button, when fitted/attached to the display assembly, integrated display assembly can be imported at the concessional 10% customs duty.

In a circular, the Central Board of Indirect Taxes and Customs (CBIC) said currently a concessional basic customs duty (BCD) rate of 10% is imposed on display assembly for use in the manufacture of a cellular mobile phone and a nil BCD rate on inputs or parts for use in the manufacture of a display assembly for use in the manufacture of a cellular mobile phone.

It said certain cases of misdeclaration by importers were intercepted by the Directorate of Revenue Intelligence (DRI) and other field formations and demand notices were issued in certain cases as well.

With the industry facing "interpretational challenges" about the display assembly of cellular mobile phones, a committee constituted with officials from both CBIC and MeitY, recommended a principle that may be used to determine the interpretation of display assembly for extending the concessional BCD rate.

If the display assembly is imported with the items/components, including receiver mesh, speaker net, support frame, and antenna pin, which are fabricated, embedded, fitted or attached to the assembly, the whole integrated assembly should also be treated as a display assembly of a cellular mobile phone, attracting a BCD rate of 10 per cent.

ICEA Chairman Pankaj Mohindroo said this circular is a big relief to the industry and will avoid unnecessary litigation.