Mobile phone users would now have to shell out more money for buying new handsets, with the government proposing to levy one per cent excise duty on them.
In his Budget speech, Finance Minister P Chidambaram said: "Excise duty of one per cent, called National Calamity Contingent Duty, is now imposed on polyester filament yarn, which is the only yarn suffering this excise duty.
I propose to remove that duty and shift the levy to cellular mobile phones."
"It will definitely increase the prices of mobile phones," LG Business Group Head (GSM) Anil Arora told PTI when asked about the impact of the proposed move.
The proposal may translate into a corresponding one per cent hike in price of mobile handsets. However, a full impact of this needs to be reviewed, a Nokia spokesperson said.
Echoing similar sentiments, Indian Cellular Association President Pankaj Mohindroo said the proposed move of levying one per cent excise duty would increase the prices of mobile phone sets.
When asked how much the prices would go up, he said, "The price rise will not be killing... It will be minimal."
Global cellular handsets majors Nokia, Samsung, Motorola and LG have their mobile manufacturing plants in India.