In a bid to strengthen ‘Make-in-India’, the government has decided to exempt parts used to manufacture open cells of panels of LED TVs from basic customs duty (BCD) and reduced the BCD on open cell and other components used to make interactive flat panel displays to 5 per cent. However, the duty on IFPD has been doubled to 20 per cent.
Sunil Vachani, Chairman, Dixon Technologies, told businessline, “To deepen the manufacturing for components for LED televisions, the government has decided to reduce the BCD on parts for open cell from 2.5 per cent to zero. With this, there is a clear arbitrage of 5 per cent wherein parts of the display is at zero and open cell display is at 5 per cent. This will encourage manufacturing of open cell display models in India. We are putting up a plant to make display panels for television, which is coming up in Noida region.”
Duty structure
The parts exempted from BCD include chips on film, PCBA and glass board or substrate cells used in manufacturing open TV panel cells. Vachani said, “IFPDs are used across boardrooms and classrooms and is a fast growing market estimated about ₹7,000 crore. But the sector was facing an inverted duty structure where the components were at higher duty than the finished product. That has been corrected and will spur manufacturing of IFPDs in India.”
Manish Sharma, Chairman, Panasonic Life Solutions India & SA, said, “Aligning inverted duty structure and the increase in BCD on interactive flat panel displays from 10 per cent to 20 per cent will enhance manufacturing in India. Reduction of duty in components for manufacturing open cell is also in the direction towards making a robust manufacturing base for LCD/LED television panels in India.”
But some industry players said that the reduction in BCD for open cell parts for LED televisions will only benefit certain players.
Avneet Singh Marwah, CEO, SPPL, a Kodak and Blaupunkt brand licensee, said, “This is applicable only to industries with bonded manufacturing plants and creates an uneven playing field for TV manufacturers without access to such facilities. For true growth, these benefits should be extended more equitably across the sector.”
Arjun Bajaj, Director of Videotex, added, “The exemption of BCD on parts of the panel is a welcome move, though it should be noted that there is only one facility in India with limited capacity to process these parts.”
“The ongoing reliance on imported open cells, due to a lack of local manufacturing capacity, remains a critical challenge. A more substantial reduction in BCD — perhaps on more components — could have better supported the sector’s growth,” he said.
