TVs to cost more from next month; concession on panel duty ends in Sept
BusinessToday.In September 14, 2020
Television prices could go up from next month as the concession offered by the government on open cell panels will cease at the end of the month. The government offered a 5 per cent import duty concession on open cell panels last year. Additionally, rates of fully-built panels that are required to make a TV have gone up by over 50 per cent.
However, the Ministry of Electronics and Information Technology (MeitY) is in favour of extending the import duty concession that helped in bringing investments into TV manufacturing. Samsung also shifted its production from Vietnam to India. A final decision, however, would be taken by the Finance Ministry, as mentioned in a report in Times of India.
TV companies told the daily that they don't have much option but to pass on the additional costs to the customers if duty concession is not extended beyond September 30. LG, Panasonic, Thomson and Sansui have predicted that TV prices are likely to go by around 4 per cent or a minimum of Rs 600 for a 32-inch television and Rs 1,200-1,500 for a 42-inch.
Contract manufacturers believe that the move would be counterproductive as it would make manufacturing costs uncompetitive. Open cell panels amount to nearly 60 per cent of the cost of a television. Instead of imposing an import duty, manufacturers say, government should introduce a phased-manufacturing programme.
Industry body Consumer Electronics and Appliances Manufacturers Association (CEAMA) and business chamber FICCI have taken up the matter with the government. Moreover, the capital-intensive fab that is necessary to make the panels is not made in India.
Senior Director at LG India Ravinder Zutshi told the daily that companies would have no option but to pass on the prices to the customers.