Abolish customs duty on mobiles: ICA

The abolition will curb the grey market and smuggling of mobile phones.

The apex body of mobile phone handset companies Indian Cellular Association has requested the Government to abolish the basic customs duty, which is around 20 per cent at present.

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This will curb the grey market and smuggling of mobile phone accessories and components for the after sales market.

To protect and provide boost to domestic manufacturing of components and accessories, the association, in its pre-budget memorandum, has recommended instead countervailing duty of eight per cent be levied, which would also help the Government earn revenue.

It said the grey market accounts for 90 per cent of the markets of the components and accessory market.

"Once the retail prices fall, the grey market will be curbed. This will also boost domestic production. The importers in the organised sector too will reduce price to attract more customers on account of price competition from quality production," ICA said.

The volumes from both the grey segments as well as the organised segments will boost Government revenue as compared to the present dispensation, which fetches low revenue inspite of the high tax rate on account of the narrow base, the association said.

Giving and example of mobile phone batteries, the ICA said India consumes about two million battery packs every year in the replacement market of which only 100,000 are manufactured indigenously while the rest are imported.