Customs duty on open cell displays halved, LED TV prices set to go down

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The government has halved the basic custom duty on open cell displays used in the manufacturing of LED television panels whereby leading television makers like Samsung, LG, Panasonic and Sony are now likely to roll back the price increase on television sets. 

A notification issued by finance ministry on Friday evening said the government has reduced duties on open cell displays of 15.6-inch and above from 10% to 5%. This constitutes almost 95% of the television market. The government had imposed 10% duty on open cell panels in the last Budget as compared to nil which was earlier. 

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The industry was lobbying against the imposition of this duty and leading players like Samsung and Panasonic had earlier this month increased prices by up to 6% while others like Sony and LG had planned similar hikes for the new models which are rolled out in April. 

Panasonic India CEO Manish Sharma said the government’s decision to revise the basic custom duty on open cell panels to 5% brings back the emphasis on ‘Make in India’ vision which will drive momentum and develop new capacities for television manufacturing within India. 

“Going forward, the consumer electronics industry can look forward to a developed manufacturing ecosystem whilst creating job opportunities,” Sharma said. 

A senior industry executive said the companies will now try to absorb the impact of 5% taxation on open cell panels to boost demand, since television sales has not been growing since last October. 

Sharma said with the new models now getting rolled out, the price increase, if any, will not be significant. “We will try to absorb the impact. With 5% duty, the overall impact on television manufacturing cost will be about 2.5%. We will make all efforts of not letting this passed to consumers to boost demand,” he said. 

In case of open cell panels, they are required to be finally assembled in the country to make the LED TV panel which is the heart of the LED televisions. Companies like Samsung, LG and Panasonic had started using this route for last two months and had invested on open cell assembling units. This was done after the government had increased custom duty on finished television sets and finished television panels to 20% and 15% respectively. 

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