Budget 2017: LED companies miffed with imposition of import duty on input components.

NEW DELHI: LED lighting companies will meet power minister Piyush Goyal against imposition of import duty on input components. Budget 2017 proposes to levy 5% basic customs duty on all parts and inputs used in manufacturing of LED lights. 

There was no customs duty on imported MPCBs so far, while there was a 10% duty on finished LED products. However, prices of LED industry are not expected to rise as the government has also reduced excise duty on components used in manufacturing LED lights to 6%. 

LED lighting industry had asked the government for 20% customs duty on finished LED lights, said Shyam Sujan, secretary general at industry association Elcoma. 

Sunil Vachani, chairman and managing director, Dixon Technologies, said the industry will make representations to the power ministry seeking suitable amendments in the proposal. 

"The PCBs (components) imported for LED lamps manufacture falls in the ITA1 list of the WTO of which India is a signatory. This bars imposition of customs duty on PCBs. The proposal would hurt the government’s Make In India scheme. We will make representations to the minister on this," he said 

Vachani said the prices of LED are not expected to increase because of the proposal as the government has proposed to lower excise duty cut on manufacture of parts used in LED lamps. 

However, electrical companies which do import drivers or PCBs for manufacturing LED lamps have hailed the move. 

"A course correction in CVD (countervailing duty) and BCD (basic customs duty) structure on renewable energy and LED products and components will give the necessary impetus to local manufacturers, aligned to government's 'Make in India' vision," Anchor Electricals said in a statement issued post budget. 

Saurabh Kumar, managing director, Energy Efficiency Services Limited that implements the government's LED lamp distribution scheme, said, "Duty cuts in LED manufacturing will encourage further innovation and support our ongoing efforts to reduce the cost of cutting-edge technology. This is a stepping stone towards India becoming a global leader in energy efficiency programmes." 

EON Electric chairman and managing director VP Mahendru said, "The Union Budget 2017-18 has come up with some interesting steps when it comes to the LED lighting industry. With rural development being one of the major focuses for 2017-18, there has been an increased allocation for the rural electrification which will in turn benefit the manufacturing and sale of the electrical appliances. The budget  The budget should have also targeted incentives and concessional interest rates for manufactures of LED Lighting products and projects keeping in mind that LED lighting can play a big role in enabling implementation of our government’s vision of 100 per cent rural electrification, and energy conservation. Establishment of special economic zones for the LED lighting industry continues to be a critical priority for the industry."