As part of ‘Atmanirbhar Bharat’, the government is looking forward to expanding domestic production capacity for open cell panels. Open cells are a key component of television manufacturing. Open-cell panels are a key component used in the manufacturing of television sets. They will now attract 5% import duty from October 1, with the government saying that a duty exemption expiring at the end of this month will not be extended as a remedy to boost domestic production.
The one-year exemption given to the item expires on September 30 said a government official. The tax break was offered only for a limited period of one year with the expectation that the industry would build capacity for manufacturing important components in India. India needs to be self-reliant, so the manufacturers cannot remain just as assemblers of imported parts. Manufacturing in India should not depend on the support of imports forever.
Tariff protection has been provided by the government to support domestic television production. A 20% customs duty has been in place on television imports since December 2017 and television import has been put in the restricted category effectively since July 31. TV producers import these panels for Rs 2,700 for a 32-inch unit and for Rs 4,000-4,500 for a 42-inch television unit, which translates to a duty impact of Rs 150-250 per television as told by the government official.
The government has been taking stern steps to boost local manufacturing and stem imports to help the economy recover and to generate employment. The government last year cut the corporate tax rate to encourage the setting up of new factories and in March offered production linked incentives for the manufacture of electronic items. The PLI scheme offers a 4%-6% incentive to eligible companies on incremental sales of manufactured goods over the base year of 2019-20. The items covered include electronic components such as sensors, printed circuit boards, etc., and mobile phones as well.
There would be no real manufacturing growth of television unless the open cell is locally made. Currently, the industry just does the assembling of television after importing most of the parts. This should not go on for long because assembly does not show any significant value addition. Value addition in the domestic market must happen in a phased manner, the official further added.