Hike on Custom Duty on Split ACs and CCTVs Proposed

  • The government said that the move will help domestic industry by creating a level playing field
  • Custom duty on IP camera, digital video recorder and network video recorder have also been increased
Finance Minister Nirmala Sitharaman with MP Auurag Thakur (Pic Source – Twitter)

The government of India, lead by Prime Minister Narendra Modi, has proposed increasing custom duty on IP and CCTV cameras, digital video and network video recorders by five per cent. This custom duty, before this announcement stood at 15 per cent on import of these items.

Nirmala Sitharaman, Finance Minister, India, said that the move is being taken to create a level playing field for the domestic industry in India. The government has announced about withdrawing exemption on custom duty on imports of good used in manufacturing electronic items such as cathode ray tubes, CD/CD-R/DVD/DVD-R, deflection components, CRT monitors/CTVs and plasma display panel.

It is to be noted here that the smartphone and smart TV market in India is largely lead by China-based companies. This move may help India based companies to compete on a level ground against their China-based counterparts.

Duty exemptions lifted from switches and sockets as well

Lifting exemption on small but critical consumer electronic items such as switches, sockets, connectors and plugs was also announced by the government. Instead of zero custom duty, all these small consumer electronic items will now fall under the ambit of applicable rates.

The government’s proposal also includes increasing customs duty on the indoor and outdoor unit of split system air conditioner by 10 per cent. Indian Government was initially charging 10 per cent custom duty on imported split ACs. This move might also help domestic split AC manufacturers in the long run.

Arun Jaitley, Ex-Finance Minister India tweeted, “As on today, most consumer items have been brought in the 18 per cent, 12 per cent & 5 per cent GST category. Only luxury, sin & some white goods remain in 28 per cent slab. A sudden reduction of all categories can lead to a massive loss of government revenue leaving the government without resources to spend.”