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

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.

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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.