With the government considering raising import duties on open-cell panels, television prices could increase by 3-5% by October 2021. This will most likely happen in the second half of 2021.
Open-cell panels are manufactured from China and used in the production of television screens. According to Expert, the aim is to progressively raise the import duty to 10-12 % over the next three years. The new customs duty rate is 5%.
The Central Board of Indirect Taxes and Customs (CBIC) declared in September 2019 that there would be no customs duty on open-cell panels if manufacturers established domestic manufacturing capacity within a year.
So far, television manufacturers have been unable to develop local manufacturing capacity for panels. Their preparations were also disrupted by the Coronavirus outbreak and subsequent lockout.
“It will be a gradual increase every year. The idea is to nudge TV brands to manufacture these components locally. They have been given time since 2019 to build local capacities,” said an official.
Prices of television sets will rise for the third year in a row in 2021. In January and April, TV prices increased due to the rise in panel prices.
Expert previously reported on a 10-30% increase in television set prices starting April 1 as all Chinese panel manufacturers raised their rates.
“We had requested the government to have zero duty for open-cell panels but their mandate is that the ‘make-in-India’ initiative must get a fillip. This sentiment is valid but there should also be financial incentives provided,” said by an expert.
The Goods and Services Tax (GST) is in addition to the customs duty (GST). TVs with a screen size of up to 32 inches are subject to an 18 % GST, whereas those with a screen size of more than 32 inches are subject to a limit of 28 %.
Prices of TV sets most volatile
Prices have risen almost every quarter since the Coronavirus outbreak. The price increase began as a result of a Chinese manufacturing shutdown, but it persisted long after the demand-supply situation had stabilised.
In India, all television manufacturers import open-cell panels from China. Despite manufacturers’ calls for an extension of the zero-customs-duty regime, the government agreed to introduce a 5% customs duty.
Samsung, LG, Sony, Thomson, Kodak, Vu, Mi, and OnePlus are all common television brands in India.
The TV industry was the most concerned when the COVID-19 outbreak was first recorded in Wuhan, China, in the last week of December 2019. There were concerns about a raw material shortage because China supplies panels, which are key components in the production of televisions.
Their worst fears were realised in January 2020, when activity in China’s manufacturing hubs came to a halt. This resulted in a severe shortage of components such as panels, resulting in a price rise of 10% in February 2020 alone.
“The last two years (2020 and 2021) have been the worst for the TV industry in India. There should be a temporary relief at least till the COVID-19 situation normalises,” said by one electronic dealer.
For the next two years, the industry has requested either a reduction in the GST rate or the abolition of duties on open-cell panels.
India placed a lockdown on March 25, halting production across the region, as the year progressed. There was a component shortage on the one hand, and a lack of television sets on the other.
Despite the fact that manufacturing has been steadily returning to normal since June, the Directorate General of Foreign Trade (DGFT) put the import of colour television sets of all sizes in the restricted category on July 30. TV sets with a screen size of 80 inches or more are usually imported from other markets.
Anti-China feelings remained high throughout this period, with the India-China conflict in the Galwan Valley resulting in the deaths of 20 Indian soldiers. Since then, Chinese components and finished products have been scrutinised, causing development delays in India.
In September, another surprise arrived in the form of an increase in TV panel rates, just in time for the Diwali shopping season. This resulted in a nearly 25% price rise.
The re-imposition of the 5% customs duty on open cells from October 1 onwards was swiftly followed. Meanwhile, panel prices continued to increase, and TV set prices continued to rise as well.
Disclaimer:The article or blog or post (by whatever name) in this website is based on the writer’s personal views and interpretation of Act. The writer does not accept any liabilities for any loss or damage of any kind arising out of information and for any actions taken in reliance thereon.
Also, www.babatax.com and its members do not accept any liability, obligation or responsibility for author’s article and understanding of user.
For Collaborating with us-
- Mail us at [email protected]
- Whatsapp us at +91-7024984925
