Mobile Phones are set to get even more expensive beginning April 1, 2013. Finance minister P Chidambaram today announced in this Union Budget speech that the government is increasing the duty on mobile phones worth more than INR 2,000.
Six per cent duty will now be levied on mobile phone instead of the current 1 per cent. This news is particularly unfortunate in the wake of poor rupee performance, which has already led to more expensive mobile phones.
The mobile phones, which cost less than INR 2,000, will not be impacted by this change.
“About 70% of imported mobile phones and about 60% of domestically manufactured mobile phones are priced at Rs.2000 or below. Mobile phones enjoy a concessional excise duty of 1% and I do not propose to change that in the case of low-priced mobile phones,” Chidambaram said in his Budget speech.
The decision to pass on the burden of increased duty to consumers still remains in the hands on manufacturers. They might take decide to take the increased duty burden on their shoulders, but that is highly unlikely.
The consumers, who import mobile phones from foreign countries, will be required to pay more duty, as they will be 100pc be impacted by this. So, if you were planning to grab a Nexus 4 from Google Play, you still have 30 days to import it at a cheaper rate.
Update: To add more clarity on the matter and also rectify what we had mentioned earlier, government is increasing the excise duty. So, the imports are not likely to be impacted by this. We are actively tracking it and will update the story as we get more information.
In the first statement from a mobile phone manufacturer, Lava has indicated to a price increase.
“The mobile phone segment is very competitive. But we have no option but to increase prices. It is a hard Budget for the mobile phone segment,” Lava Founder and Director S N Rai said.
“The increase in the excise duty on mobile phones will not have a positive impact on the mobile industry and should lead to an increase in prices for end consumers,” Samsung India’s Asim Warsi said.