Mobile phone prices could fall by up to Rs 1,000 shortly, as the Budget has exempted duty-free imports from the 4 per cent countervailing duty.
The basic Customs duty on mobile phones was brought down to zero last year. However, a 4 per cent countervailing duty was imposed on all ITA (information technology agreement) goods, their parts and components.
This year, Finance Minister P Chidambaram has extended the 4 per cent countervailing duty to all industrial and agricultural imports but has brought in a clause exempting items with zero Customs duty from it.
A notification to this effect was issued by the department of revenue to all chief commissioners on February 28 itself.
As a consequence, the 4 per cent countervailing duty will not apply to mobile phones because the imports attract no Customs duty. However, the mobile phone industry has not yet decided to pass on this benefit to users, as it awaits clarity in this regard.
"Mobile phones can become still cheaper, but we are waiting for a day or two to see if there are any changes," a leading vendor said.
Other categories of imports that have also been exempted from the special duty, include all goods that are exempt from VAT, those that are exempted by way of excise duty, crude oil, kerosene for public distribution, LPG for domestic supply, passenger baggage, fertilisers and their inputs.Do you want to discuss stock tips? Do you know a hot one? Join the Stock Market Investments Discussion Group