Mobile phone handsets prices will increase, as the federal government has announced a new kind of levy of up to Rs 5,000 on importing mobile phone handsets. According to the Finance Bill 2018-19, there shall be levied a mobile handset levy at the rates specified on smart phones of different categories.
The levy will be zero where import value of handset (including duties and taxes) does not exceed Rs 10,000. There will be a levy of Rs 1000 per set where import value of handset (including duties and taxes) exceeds Rs 10,000 but does not exceed Rs 40,000. There will be a levy of Rs 3000 where import value of handset (including duties and taxes) exceeds Rs 40,000 but does not exceed Rs 80,000. There will be a levy of Rs 5000 where import value of handset (including duties and taxes) exceeds Rs 80,000 per set.
According to the Finance bill a levy of Regulatory Duty (RD) @ Rs 175/set on completely knocked down (CKD)/ semi-knocked-down (SKD) kits of mobile phone has been proposed. The RD on completely knocked down (CKD)/ semi-knocked-down (SKD) kits of mobile phone was Rs 200 per set which has now been reduced to Rs 175 per set.
According to experts, this may discourage digitization and encourage the smuggling of mobile phones. The move came as an effort to curtail growing imports and generate additional revenue. Industry experts said that imposing levy on mobile phone sets will hurt the information technology sector at large. At the same time, this will also encourage smuggling of handsets as the incentive for illicit trade will be increased with the levy.
Mobile phones import witnessed a phenomenal growth of 14.99 percent in the first nine months (July-March) of 2017-18 as it remained $603.075 million compared to $524.442 million during the same period of 2016-17 (July-March). Mobile phone imports in March 2018, which were $77.042 million, increased by 18.41 percent than $65.062 million imports in March 2017, and increased by 10.41 percent compared to $69.779 million in February 2018.