Open cell panels, a key element used in the production of tv sets, will appeal to 5% import duty from 1 October, with the authorities announcing that a duty exemption expiring at the cease of this month will not be extended – to reinforce domestic production.

As component of ‘Atmanirbhar Bharat’ the authorities is keen to enlarge domestic production capacity for open cell panels in order that imports can be curbed.

The one-yr exemption given to the object expires on 30 September, defined a government official, who requested not to be named.

“The tax break was offered for a limited period of one year in anticipation that the industry would build capacity for manufacturing critical components in India. For India to be self-reliant, manufacturers cannot remain merely assemblers of imported parts. Manufacturing in India cannot survive on support of imports forever,” said the official.

The authorities has supported domestic tv manufacturing by way of tariff protection. A 20% customs duty has been in vicinity on tv imports since December 2017 and tv import has been placed in the limited category, effective 31 July.

Television manufacturers import these panels for ₹2,700 for a 32-inch unit and for ₹4,000-4,500 for a 42-inch tv unit, which interprets to a obligation effect of ₹150-250 per tv, stated the official.

The Narendra Modi administration is taking steps to reinforce local production and stem imports to assist the financial system get better and to generate employment. The authorities last yr reduce corporate tax rate to encourage putting in of new factories and in March provided manufacturing linked incentives (PLIs) for manufacture of electronics objects.

The PLI scheme gives 4%-6% incentive to eligible electronic organizations on incremental income of manufactured items over the base yr of 2019-20. The items covered consist of cell phones and digital components together with printed circuit boards and sensors.

“No real manufacturing growth of television could happen unless open cell is locally made. The present activity carried out by the industry is only of assembly of television after importing most of the parts. This cannot go on for long as assembly does not entail any significant value addition. Deepening of value addition in the domestic market must happen in phased manner,” the official added.