KOLKATA: The ministry of finance has scrapped the import duty on open cell LED TV panel from 5% to zero in a late night notification issued on Tuesday. This is the most critical component used in LED TV manufacturing accounting for 65-70% of the total production cost.
This is going to reduce television prices considering around 60-65% of TV sets sold in the country are locally produced where the TV panel is procured after paying 5% import duty and also going to give a boost to the Make in India initiative.
The government notification issued said “open cell (15.6 inch and above) for use in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels” has been made nil with immediate effect.
It has also clarified that there will be no duty on “goods used in the manufacturing of Open cell of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels” such as chip on film, printed circuit board assembly and cell (glass board/substrate.”
An industry executive said while there was already no duty on these components but it was a grey area and a notification specifying nil duty will further boost investor confidence.
The industry said this will also revive LED TV manufacturing in the country since India’s largest television manufacturer Samsung had exited local TV production last year October due to this imposition of 5% duty on open cell TV panels.
Contract manufacturer Dixon Technologies chairman Sunil Vachani said scrapping the duty will help to reduce input cost at a time when the TV market is not growing. “It will help in building a strong ecosystem of manufacturing and eventually make India a hub for export of LED televisions,” he said.
ET had earlier written that the Centre was contemplating to scrap the duty on open cell TV panel to boost manufacturing and bring back large investors like Samsung. Samsung had started import from Vietnam through the free trade agreement (FTA) route. Some more companies like LG and Sony too were contemplating similar imports for price competitiveness.
The Rs 22,000 crore television market has been flat this year and declined by 2-3% in July and August with consumers postponing purchases due to high prices, poor sentiments and consuming audio-visual streaming content mostly on their smartphones.
The Ministry of Electronics and IT and the Department for Promotion of Industry and Internal Trade have also pushed for reduction of goods and services tax (GST) on large-screen LED televisions to 18% from 28% to revive demand in the festive season. The industry is now pinning its hopes on a tax cut in the GST Council meeting scheduled to take place in Goa this Friday.
At present, televisions up to 32 inches attract 18% GST but those with larger screens attract 28% duty. Sales of televisions up to 32 inches are declining, accounting for 55% share in overall sales as compared to 75% two years back as consumers want to buy larger screens.
Source: economictimes.indiatimes.com