Customs duty rise on 8 telecom items mulled

To boost local manufacturing, the government is planning to increase the Customs duty on eight telecom products, mainly network equipment, required for broadband and wireless services.

According to reports of a recent discussion of an inter-ministerial panel, the duty was likely to be 17.5 per cent. It had proposed the duty be 10-12 per cent. Most such equipment are imported. During the past few months, the government has been discussing a proposal to make it mandatory for telecom companies to buy a percentage of their requirement of such products from local manufacturers. The Department of Telecommunications (DoT) had raised concerns, considering the zero-duty promise made at the World Trade Organization.

During a recent discussion, the DoT had noted that the proposal to impose Customs duty could have negative implications, and there were possibilities that tariffs would increase for consumers.

The Department of Revenue had also objected to the proposal saying the government should take legal advice on what the implications (from the WTO angle) could be.