CBIC clarifies BCD Rate applicable on Display Assembly for Manufacture of a Cellular Mobile Phone [Read Circular]

The Central Board of Indirect Taxes and Customs (CBIC) has issued a clarification regarding the applicability of the Basic Customs Duty (BCD) rate on display assembly for use in the manufacture of cellular mobile phones and inputs or parts for use in the manufacture of a display assembly for use in the manufacture of a cellular mobile phone.

A Notification No. 50/2017-Customs dated June 30, 2017, issued by the Board provided a concessional basic customs duty (BCD) rate of 10% for display assembly for use in the manufacture of cellular mobile phones and a Nil rate on inputs or parts for use in the manufacture of a display assembly for use in the manufacture of a cellular mobile phone.

While Notification No. 57/2017-Customs clearly prescribed the applicable BCD rates on Display Assembly of cellular mobile phones and its parts, instances of misdeclaration of Display Assembly imported as parts were reported. The industry has made representations to the Ministry of Electronics and Information Technology (MeitY) for intervention in the matter arguing that the investigation is having an adverse effect on the industry for future expansion and continuity of business.

In the inter-ministerial consultations with MeitY regarding the misdeclaration of imports and the recommendation now made by MeitY, the following is brought to the notice of field formations.

Display Assembly of a cellular mobile phone may be imported with or without the back support frame of metal/plastic fitted in the assembly. Although the back support frame of metal/plastic has no essential function in display and only provides strength, protection, and structural stability, the mere attachment of the back support frame of metal/plastic on the display assembly does not alter the essential characteristic of display in any manner, and the assembly would continue to be treated as a Display Assembly of a cellular mobile phone. Therefore, if the display assembly of a mobile phone is imported with merely a back support frame of metal/plastic attached to it, the assembly continues to be the Display Assembly of a cellular mobile phone and a BCD rate of 10% shall be applied on such assembly consisting of Display Assembly and only the back support frame of metal/plastic in addition [ though Back support frame of metal/plastic, if imported individually, will attract a BCD rate of 15%].

Any other item like the sim tray, antenna pin, speaker net, power key, slider switch, battery compartment, Flexible Printed Circuits (FPCs) for volume, power, sensors, speakers, fingerprint etc, come fitted along with a Display Assembly with or without a back support frame of metal/plastic, then the whole assembly attracts a BCD rate of 15%. Such assembly [consisting of a Display Assembly of a cellular mobile phone with or without a back support frame, plus any other parts as mentioned herein] is not eligible for the benefit of concessional rate of 10% BCD rate under S. No 5D of notification No. 57/2017-Customs.

To Read the full text of the Circular CLICK HERE

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Circular No.14/2022 , 18, August 2022