The government on Monday extended the four per cent countervailing duty (CVD) exemption on imported mobile accessories and components by a year, a move that would encourage manufacturing of handsets in India but not impact consumer prices.
"Full exemption from CVD of four per cent was available to accessories, parts and components imported for the manufacturing of mobile phones till the 30th of June, 2009.
I propose to re-introduce this exemption for another year," Finance Minister Pranab Mukherjee announced in the Budget for 2009-10.
Indian Cellular Association (ICA) President Pankaj Mahindroo said the one-year extension of exemption will not have any impact on the existing prices of mobile phones, but this would certainly boost manufacturing in India by global handset makers, besides helping Indian brands to manufacture here that are importing the phones.
Korean handset maker and number two player in India Samsung said there would be no changes in terms of end consumer prices.
India's largest mobile handset seller Nokia said the CVD exemption would continue to ensure affordable access to mobile phones and thus, drive telecom proliferation.
However, the Budget has overlooked the industry's demand to rationalise multiple taxes currently being imposed on it at both the Centre and State levels, Nokia said.