Govt waives customs duty on electronics inputs

New Delhi: The government has waived basic customs duty on goods used in the manufacturing of display assemblies, lithium-ion cells and inductor coil modules as it looks to promote domestic production of electronic devices like smartphones, laptops, wearables and smart TVs.The finance ministry issued three separate notifications giving effect to the basic customs duty (BCD) waiver on the goods used in the manufacture of the three key components used in electronic devices.Read more: Govt extends duty relief for electronics, lithium-ion battery manufacturing till 2029This exemption is in line with the government's efforts to promote domestic electronics manufacturing under the PLI scheme.

The duty waiver would reduce import dependence and strengthen the electronics ecosystem with local production.The exemptions on inputs used in display assemblies and inductor coil modules would be valid till March 31, 2029, the notifications said.AMRG Global Managing Partner Rajat Mohan said the government has now consolidated separate customs exemptions for machinery used in the manufacture of lithium-ion cells for mobile handsets and electric vehicles into a single technology-neutral exemption applicable to machinery used for the manufacture of 'lithium-ion cells'."This simplifies the customs framework, removes end-use-based distinctions, and significantly reduces compliance and interpretational challenges for manufacturers," Mohan said.The amendment is expected to encourage fresh investments in domestic lithium-ion cell manufacturing by providing greater flexibility to manufacturers operating integrated production facilities."The biggest beneficiaries will be battery gigafactories, electric vehicle manufacturers, consumer electronics companies, battery energy storage system (BESS) manufacturers, renewable energy projects, telecom infrastructure providers, data centres, medical device manufacturers, drone manufacturers and industrial automation sectors, all of which increasingly depend on lithium-ion cells," Mohan added.Grant Thornton Bharat Partner and Tax Controversy Management Leader Manoj Mishra said the exemption for inputs used in display assemblies for automotive, medical and industrial applications broadens support beyond consumer electronics, while the relief for inductor coil modules used in wireless charging will benefit smartphone manufacturers adopting advanced features.Mobile devices industry body ICEA chairman Pankaj Mohindroo said that the broadening of the duty dispensation for display assembly to auto display,medical display, and industrial displays is an excellent step which will result in building the industry in these verticals as it has happened in Mobiles and Consumer Electronics.Read more: India grants retrospective custom duty relief on imports of select nuclear power generation equipment"We have a robust industry of display assembly in these.

The exemption on important capital goods for the lithium ion industry across all segments, including EV's and BSS, will make the industry more competitive.

The nation needs this industry to rapidly accelerate in manufacturing," he said. ...