Govt cuts customs duty on electronics, battery manufacturing inputs

Duty exemptions on display assembly and wireless charging components, along with expanded relief for lithium-ion cell machinery, aim to boost domestic manufacturing and value addition

The Centre has lowered import duties for a range of components and capital goods used in electronics and battery manufacturing by issuing three customs notifications providing basic customs duty (BCD) exemptions on select inputs and machinery.

 

The notifications, issued on July 8, extend duty relief for components used in display assemblies and wireless charging modules while expanding the list of machinery eligible for concessional duty for lithium-ion cell manufacturing. The move aims to improve cost competitiveness and support domestic value addition in electronics and electric mobility.

 

According to one notification, the government has exempted five components used in manufacturing display assemblies for automotive, medical and industrial applications from BCD until March 31, 2029. These include cells, flexible printed circuit assemblies (FPCAs), backlight units, frames and anisotropic conductive film (ACF).

 

The exemption, however, does not cover display assemblies for mobile phones, smartwatches, smart meters, television panels and interactive flat-panel displays.

 

In a separate notification, the Centre has extended nil customs duty until March 31, 2029, on six components used in manufacturing inductor coil modules for wireless charging in cellular mobile phones. These include nano-crystalline assemblies, E-shields, PET liners, PC shims, stranded and NFC coils, and neodymium-iron-boron (NdFeB) magnets.

 

The government has also issued a third notification replacing the existing list of machinery eligible for concessional customs duty for lithium-ion cell manufacturing with an expanded list of 85 capital goods.

 

The revised list includes coating machines, winding machines, welding systems, testing equipment, formation machines, drying systems and other specialised manufacturing equipment used across the lithium-ion cell production process.

 

"The Government's decision to grant BCD exemptions on key inputs used in the manufacture of display assemblies, wireless charging modules and lithium-ion cells is another significant step towards strengthening India's electronics manufacturing ecosystem," said Manoj Mishra, partner and tax controversy management leader at Grant Thornton Bharat.

 

"By reducing the import cost of critical components and capital goods, these measures are expected to improve cost competitiveness, encourage greater domestic value addition, and support the localisation of high-value manufacturing in smartphones and other electronic products. The expanded list of exempted capital goods for lithium-ion cell manufacturing is also likely to accelerate investments in domestic battery manufacturing," he added.