Budget 2013: Mobile phones priced above Rs.2,000 may get costlier
NEW DELHI, Feb 28, 2013 (Mint - McClatchy-Tribune Information Services via COMTEX) --
Finance minister P. Chidambaram proposed to raise the duty on mobile phones that cost more than Rs.2,000 to 6% from 1%.
"About 70% of imported mobile phones and about 60% of domestically manufactured mobile phones are priced at Rs.2000 or below. Mobile phones enjoy a concessional excise duty of 1% and I do not propose to change that in the case of low-priced mobile phones," Chidambaram said in his Budget speech on Thursday.
The mobile phone industry is already preparing to lobby the government to reverse the proposed changes.
"We are moving for a status quo on the current tax regime," said Pankaj Mohindroo, national president for the mobile phone industry lobby group, Indian Cellular Association. "We are extremely disappointed with the proposal to increase the duty, especially for an industry that is in a constant fight with the grey market. This move will give a fillip to the grey market."
"We are at a time when some 120 million mobile phone users are ready to move to smartphones. It's not the feature phone but the smartphone that is now needed by the farmer and the trader," he said. "This transition to the smartphone is greatly hampered by such a move, especially at a time when the industry is already reeling from the VAT (value added tax) on mobile handsets that has been implemented in some states."
Mohindroo also drew attention to the electronics manufacturing policy that talks of mobile phones and tablet computers being goods of national importance and the taxes on them should be rationalized.
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