Call to Lift Threshold for Higher Taxes on Mobile Phone Sales

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India's Department of Telecom has asked the Finance Ministry to issue an exemption for low cost mobile phones from the recently announced rise in excise duty.

The government has planned to raise the excise duty from 1% to 6% on handsets costing above Rs2,000 (US$37). The DoT is asking for the threshold to be raised to Rs5,000 per handset.

"The exemption on increase in excise duty for mobiles up to Rs 2,000 does impact a lot of buyers and the exemption limit needs to be increased." a senior telecoms ministry official told the Financial Express.

It's estimated that around 20 million phones sold in 2013-14 would be taxed at the lower rate if the excise duty threshold was raised.

The Indian Cellular Association (ICA) President, Pankaj Mohindroo said at the time of the tax rise that the move would encourage grey market, adding that ICA will approach the finance ministry for reversal of the tax change.

Around 20-30 million of the 200 million phones sold last year were smuggled into the country.

On the web: Financial Express

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