DRI clarification on display assembly components to prevent unnecessary industry litigation: Mobile handset players

The circular provides a detailed list of parts and components that constitute a Display Assembly of a mobile phone and removing the ambiguity regarding the display assembly.

Mobile handset players said the Department of Revenue Intelligence’s (DRI) clarification on input components attached to display assembly of a mobile phone is a big relief and will help the industry will avoid unnecessary litigation.

As per the DRI notification, input components attached to display assembly of a mobile phone now attract a combined import duty of 10%, clearing the ambiguity surrounding duty calculations for over four years now.

DRI’s notice resolves the prolonged confusion among mobile manufacturers, customs officers, the DRI, and the electronics & IT ministry, who have been grappling with clarity since the 10% basic customs duty was imposed on display assembly imports in 2020.

Pankaj Mohindroo, Chairman of ICEA said the circular resolves ambiguities and interpretation challenges for display assembly that have troubled the mobile industry for the past two years.

The circular provides a detailed list of parts and components that constitute a Display Assembly of a mobile phone and removing the ambiguity regarding the display assembly.

India Cellular & Electronics Association is the apex industry body representing India's electronics manufacturing sector and players like Apple, Foxconn, Oppo, Vivo, Xiaomi and Dixon among others.

The department cleared that certain components such as SIM socket, SIM tray, antenna pin, side keys like power key, slider switch and volume button which are not part of phone displays, may come fitted or attached with display assembly kits. In that scenario, “The assembly continues to be a display assembly of a cellular mobile phone and a BCD rate of 10% shall be applied on the whole integrated assembly,” DRI said in a circular released late Friday.

“This circular is a big relief to the industry and will avoid unnecessary litigation. ICEA particularly acknowledges the Ministry of Electronics & IT and Prime Minister’s Office for leading the way to find a resolution to this challenge. We also remain deeply appreciative that the Department of Revenue has acknowledged and understood the critical issue” he said.

Handset makers through their representative body ICEA took up this issue with the relevant authorities and highlighted not just the matter, but the fact that such an interpretation would not be particularly helpful to India’s image of a country that was seriously pursuing policies to offer a predictable and stable business environment. “This clarification, we hope, will set all such challenges to rest,” Mohindroo said.

The "pro-industry" initiative is key to achieving "Ease of Doing Business”, Mohindroo said, adding that the decision provides predictability to business costs in India, aiding the country in reaching its target of $500 billion in manufacturing by 2030.