Television prices set to rise as customs duty on open-cell panels is back to 5%

Television sets will soon become expensive as the 5 percent customs duty on open-cell panels has been re-imposed from October 1.

The Central Board of Indirect Taxes and Customs (CBIC) said in a notification that the zero customs duty for open-cell panels, valid between September 2019 and 2020, had come to an end.

Just ahead of the busy festive season, this will lead to an immediate price hike in televisions. Open-cell panels are used in manufacturing LCD/LED screens for televisions.

Panel prices are already on the rise since manufacturers have increased prices by 20-25 percent since September. About 60 percent of the price of the television is the cost of the open-cell panel that makes the screen.

Moneycontrol earlier reported that the zero customs duty regime will come to an end in October.

Television makers were hopeful of a temporary extension, at least till the end of December, to see them through the festival season. Sources said the government was keen on incentivising local manufacturing.

“The current zero customs duty regime for open cells ended on September 30. The idea was to enable TV makers to become self-reliant by sourcing these components locally,” said an official.

In September 2019, after requests from television makers, the CBIC announced that there would not be any customs duty applicable on open-cell panels. However, the body clarified that manufacturers must work towards developing domestic manufacturing capacities.

In this one-year duration, TV manufacturers were unable to set up local manufacturing capacities for panels. The coronavirus outbreak and subsequent lockdown also hampered these plans.

The open-cell is a critical component in the manufacture of television sets. At present, there is no local manufacturing of open cells in India. The entire component is imported from markets such as China. These raw open cells are imported and then assembled in India for use in television sets.

Between September 2019 and 2020, the zero customs duty was applicable for open cells (15.6 inches and above) used in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels.