Finance ministry has cut customs duty on open-cell used in LED/LCD panels from 5 percent to zero
TV prices are likely to fall by 4-5 percent with the finance ministry doing away with import duty on open-cell LED panels. Earlier, these panels attracted a 5 percent duty.
In a late-night notification on September 17, the ministry of finance said the open-cells for LCD/LED panels will not attract any customs duty. The ministry had said that it will be valid till September 30, 2020 post which local manufacturing of open cell could be incentivised.
This is applicable for open-cell (15.6 inches and above) used in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels. Further, components like the chip on film, printed circuit board assembly and cell used in LCD/LED TV panels will also be exempt from customs duty.
Arjun Bajaj, Director at Videotex International (which manufacturers TVs for brands like Daiwa, Shinco and Telefunken) said that this (customs duty cut) will drastically boost the sales of the televisions in the coming months and also allow brands to push sales for bigger TVs.
“Government's initiative to cut duty from 5 percent to zero shall bring back focus on Make in India and in turn help manufacturers to be more competitive in the cluttered TV market. It will benefit the end-user to get the best LED TV at the most affordable prices and help India to become an export hub in future,” said Bajaj.
Open-cell is a critical component used in manufacturing television sets. At present, there is no local manufacturing of open cell in India so a higher customs duty meant that TV prices stayed high.
Manish Sharma, President and CEO, Panasonic India and South Asia said that since open cells form a major share of the total manufacturing cost of TVs, the move will allow them to pass the benefits to the end consumer which would be about 3-4 percent reduction in price.
Consumer Electronics and Appliances Manufacturers Association (CEAMA), an apex body representing Consumer Electronics, Home Appliances and Mobile Industry said LED TVs comprise one of the largest segments under the entire domain of Appliance and Consumer Electronics accounting to a volume of almost 15 million with an estimated sale value of almost Rs. 40,000 crore.
Ahead of the festive season, this could also help boost sales for the players. Avneet Singh Marwah (CEO SPPL and Brand Licensee Thomson TV in India), said the move to cut duties will boost Indian manufacturing and definitely improve market sentiments this festive season, which will further reflect on sales.
The LED TV industry is also one of the biggest employers with estimated employment of 50,000 people directly and many more indirectly through the ancillary units.
While a substantial portion of the demand for TVs is being met through local production, CEAMA said the option of sourcing from Free Trade Agreement (FTA) countries remains a threat.Kamal Nandi, President, CEAMA and Business Head & EVP, Godrej Appliances added that they will work closely with the government to formulate and facilitate phased manufacturing of TVs and end-to-end manufacturing of televisions in the country.The Great Diwali Discount!
Unlock 75% more savings this festive season. Get Moneycontrol Pro for a year for Rs 289 only.
Coupon code: DIWALI. Offer valid till 10th November, 2019 .