Govt Hikes Custom Duties on Telecom Equipment to Promote Make in India

By October 12th, 2018 AT 6:25 PM

The Government of India has hiked customs duties on telecom equipment and has also imposed taxes on the printed circuit boards which are used in the manufacturing of the same. Products being imported from other countries like base stations, optical transport equipment, combination of one or more of Packet Optical Transport Product or Switch (POTP or POTS) have been levied with an increased customs duty of 20% in order to tackle the current account deficit situation in India along with propelling growth for the make in India program. Notably, the customs duties which were being levied on this equipment were only 10%; now the figure has doubled.

hikes-custom-duties-telecom-equipment

Custom Hike – an Effect of Account Deficit

Also, as per the new regulation and rates, the equipment which used to enjoy zero duties would also be levied with 10% of charge. As per the notification of Central Board of Indirect Taxes and Customs on Thursday, these new rates would come into effect starting today, i.e. October 12. Pulling up the data for the present and previous years, it’s apparent that India imported approximately $21 billion worth of telecom equipment in FY18, as compared to the $16.2 billion in FY17.

To tackle with a much more mainstream issue of current account deficit the customs duty on many more products has been hiked. These consumer goods products include air-conditioners, washing machines, refrigerators, footwear, jewellery, tableware, and furniture fittings. Further, aviation turbine fuel has also been levied with more duty as compared to the previous rates.

Situation Predicted to Worsen

These changes come as the result of current account deficit declining to 1.9% of GDP in FY18 down from 0.6% which was the rate in the previous year. However, the situation is only going to worsen as the deficit has been predicted to rise to the figure of 2.8% in the current year.

In the first five months of the FY, the trade deficit has grown to $80.4 billion against the $67.3 billion, which was the figure around the same time last year. Going by the words of a top executive in one of India’s top telecom equipment manufacturing company, this move is going to force the hands of telcos to procure equipment from local vendors thus reducing the dependence on international companies especially with the rupee getting weaker.

Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

9
Leave a Reply

avatar
Photo and Image Files
 
 
 
3 Comment threads
6 Thread replies
0 Followers
 
Most reacted comment
Hottest comment thread
8 Comment authors
Priteshtri_visdragonmonkMani Mahesh DhimanRahul Recent comment authors
newest oldest most voted
Rahul
Rahul

Bad Move.This stupid government will ruin everything. A sincere request to the govt to save our falling Rupee.

Mani Mahesh Dhiman
Mani Mahesh Dhiman

This is good move, rupee is falling because of high crude oil price

geek
geek

Seems Jio has completed procurement of equipment……….

Chetan | Bangalore
Chetan | Bangalore

Jio imports RF equipment from Korea and it is already under free trade. Only band 850 antenna is imported from China which belongs to other brand

tri_vis
tri_vis

Bolne ko kuch bhi

Recent Posts

Motorola One Vision First Impressions: Tall 21:9 Display is the Highlight of this Mid-Range Phone

If there is one thing in today’s smartphones that has undergone a lot evolution, it is the display. The smartphone...

BSNL Under Urgent Financial Distress, Sends Out Letter to Government Asking for Help

Bharat Sanchar Nigam Limited (BSNL), the state-led telecom operator has been suffering financial losses ever since the Mukesh Ambani led...

Tata Sky Subscribers Will be Able to Save Costs Owing to No Lock-in Period on Channel Packs

A while back, Tata Sky had introduced lock-in period on its channel packs, thus forcing the subscribers to subscribe to...