New Delhi: The government has waived basic customs duty on goods used in manufacture of display assemblies, lithium ion cell and inductor coil module 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 manufacture of the three key components used in electronic devices.
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This 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 module 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.
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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.
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