Mobile companies allege duty evasion in imports from Asean

The domestic cellphone industry has flagged possible duty evasion in imports of the completely built unit (CBU) of mobile phones, suspected of Chinese origin, from Asean countries under the free trade route.

In a letter to Revenue Secretary Hasmukh Adhia, Indian Cellular Association (ICA) said there is a possibility of customs duty evasion in import of CBUs from Asean countries at zero duty as the mobile devices contain more than 65 per cent material from non-Asean origin.

Government has imposed 20 per cent import duty on mobile phones to promote indigenous manufacturing of the devices as they have security implications.

“We wish to bring to your notice the possibility of substantial case of customs duty evasion in the case of import of CBU of mobile phones from Asean countries, specially Vietnam, Indonesia and Thailand, at nil rate,” ICA National President Pankaj Mohindroo said in the letter.

India has signed free trade agreements with Asean countries which covers Singapore, Malaysia, Indonesia, the Philippines, Thailand, Myanmar, Laos, Cambodia, Vietnam and Brunei.

Besides, there is a special dispensation for the Philippines which is charged a duty of 2-6 per cent. Other nine countries are largely under the special dispensation of zero duty.

Mohindroo said the zero-duty treatment is available only after a government appointed agency of the exporting country gives a certificate that the device is of Asean origin.