Six percent excise duty on all mobile phones

Finance Minister P. Chidambaram Monday said more funds should be allocated to the telecom sector and announced a restructuring of excise duties on mobile handsets.

Presenting the interim budget 2014-15 in the Lok Sabha, the finance minister said excise duties will be restructured to six percent for all categories.

"The rates will be 6 percent with CENVAT credit, or one percent without CENVAT credit," he said.

This, he added, would spur domestic manufacturing of handsets.

"To encourage domestic production of mobile handsets, which has declined, and to reduce the dependence on imports, which have increased, I propose to restructure the excise duties for all categories of mobile handsets," Chidambaram told the lower house of parliament.

CENVAT means tax on value addition on the goods manufactured according to central excise and customs act difinition. CENVAT credit relates to input goods or input services.

The Union Budget 2013-14 had raised the excise duty on mobile phones priced above Rs.2,000 to 6 percent from one percent.