Import duty on open cell TV panel scrapped to boost mfg

Removal of 5% customs duty will help reduce manufacturing cost by around 3%

The government has scrapped import duty on open cell TV panel used to make television sets, as it aims to boost local manufacturing by lowering input costs for TV makers who have been complaining about a slump in demand.

The decision to remove 5% customs duty will help reduce manufacturing cost by around 3% but it wasn't immediately clear if all TV makers will pass on the benefit to consumers.

Panasonic said it will pass on the benefit of 3-4% reduction to consumers.

Finance Ministry in a notification said customs duty on "open-cell (15.6-inch and above), for use in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels" will be nil as against 5% import duty previously. Open cell panels make up for over 6070% of the cost of manufacturing LED TV sets. Most TV makers import these panels.

Customs duty was said to be a factor behind Samsung Electronics' decision last year to shut its TV production unit in India and move to Vietnam.

Demand for TV sets in the country has been on a decline amid a general consumer slowdown, heightened competition and increased GST on large TV sets.

Besides, the government has also waived custom duty on import of Chip on Film, Printed Circuit Board Assembly (PCBA) and Cell (glass board/ substrate), which are used to manufacture open cell TV panels.

Television industry welcomed the move saying the move will reduce the cost of making televisions and boost domestic manufacturing.

The announcement comes ahead of the festive season and would positively impact the sales of LED TVs.

The government had in June 2017, imposed a customs duty of 5% on import of such panel.

The other goods for use in the manufacture of open cell of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels of heading 8529 would also attract nil duty.