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Govt to ban duty-free import of flat panel TV sets from Aug 26
Next time on a holiday abroad, you may well drop the high-end flat-screen television set from your shopping list. For, on Monday, the government said it will prohibit duty-free import (by way of free baggage allowance) of flat panel television sets from August 26.
So far, airline passengers could import such sets costing up to Rs35,000 duty-free. Come August 26, consumers will have to pay a 35% duty and some other additional charges.
The ban on free import is another step to stem the rupee fall and tame the galloping current account deficit (CAD, which moderated to 3.6% in the March quarter, but is expected to jump to 4.9% in the June quarter; see related reports alongside.)
Last fiscal, too, CAD came in at a bothersome 4.8%. As a result, the government has been taking several steps to reduce imports, like the increase in import duty on gold thrice this year. It is also considering a tax on other non-essential items like consumer durables, watches, arts and artefacts.
Anirudh Dhoot, president of the Consumer Electronics & Appliances Manufacturers’ Association, believes such measures will likely benefit the domestic consumer durables players who have invested over Rs1,500 crore in setting up manufacturing facilities for flat panel TV sets in the country.
“Our estimate is that there is a demand for about 8 million flat panel TV sets. But 3-3.5 million sets are typically imported every year, mostly through either free baggage allowances or concessional rate of duties under the free trade agreements with various countries. Thus, some 40% of the demand was being met through imports,” said Dhoot.
Free import of high-end TV sets as part of hand baggage may have already caused the government an estimated loss of Rs750 crore annually, said Dhoot. However, potential gains from the ban on free import of flat-screen TV sets are not yet quantifiable, he said.
Meanwhile, as a result of the falling rupee, makers of consumer durables have initiated a third round of price hikes in the domestic market this year.
Next time on a holiday abroad, you may well drop the high-end flat-screen television set from your shopping list. For, on Monday, the government said it will prohibit duty-free import (by way of free baggage allowance) of flat panel television sets from August 26.
So far, airline passengers could import such sets costing up to Rs35,000 duty-free. Come August 26, consumers will have to pay a 35% duty and some other additional charges.
The ban on free import is another step to stem the rupee fall and tame the galloping current account deficit (CAD, which moderated to 3.6% in the March quarter, but is expected to jump to 4.9% in the June quarter; see related reports alongside.)
Last fiscal, too, CAD came in at a bothersome 4.8%. As a result, the government has been taking several steps to reduce imports, like the increase in import duty on gold thrice this year. It is also considering a tax on other non-essential items like consumer durables, watches, arts and artefacts.
Anirudh Dhoot, president of the Consumer Electronics & Appliances Manufacturers’ Association, believes such measures will likely benefit the domestic consumer durables players who have invested over Rs1,500 crore in setting up manufacturing facilities for flat panel TV sets in the country.
“Our estimate is that there is a demand for about 8 million flat panel TV sets. But 3-3.5 million sets are typically imported every year, mostly through either free baggage allowances or concessional rate of duties under the free trade agreements with various countries. Thus, some 40% of the demand was being met through imports,” said Dhoot.
Free import of high-end TV sets as part of hand baggage may have already caused the government an estimated loss of Rs750 crore annually, said Dhoot. However, potential gains from the ban on free import of flat-screen TV sets are not yet quantifiable, he said.
Meanwhile, as a result of the falling rupee, makers of consumer durables have initiated a third round of price hikes in the domestic market this year.