Once the Budget 2017 is implemented, prices of mobilephones will shoot up by nearly 1%. This move comes after the government proposed to impose customs duty on a component that makes up about 25-30% of the cost of making a phone.The component is a populated printed circuit boards (PCB) used for mobile phones and the government has proposed to impose a 2% special additional duty on it as these are imported into the country. The move comes along in order to 'provide adequate protection to domestic industry', the government said, which will benefit local manufacturers of PCBs.
"This is aimed at incentivizing manufacturing of PCB locally, which is major step towards bringing value addition to India. This can lead to marginal cost increase (less than 1%) on mobile phones that use imported PCBs,” said Bipin Sapra, an indirect tax expert at EY.