New Delhi: The government on Tuesday removed import duties on open cell LED panels used in the production of television sets, a move that could lower the input costs for TV makers who have been complaining about a slump in demand.

Imported open cell panels, which constitute a chunk of cost for television sets, earlier attracted an import duty of 5%.

In a notification released by the ministry of finance late of Tuesday night it has been notified that “customs on (15.6" and above) use in the manufacturing of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels" were quantified as nil down from the previous 5%.

Panels make up over 60-70% of the cost of manufacturing LED TV sets and were a point of contention for TV makers who have been seeking relief on customs and GST on TV sets.

Currently, open cells panels are not manufactured in India and companies rely on imports of these key components part of LED television sets. An import duty levied by the government on open cell LED panels had also pushed some electronics makers to import television sets from neighbouring markets such as Vietnam and Thailand to avoid duties on open cell panels, The Economic Times reported in July.

But can move will now help boost domestic manufacturing and assembly of TV units in India.

Electronics makers welcomed the move adding that it could lead to a drop in prices of TV sets between 2-4%, depending on the category.

“The reduction of custom duty on open cell from 5% to 0% shall prove to be beneficial as presently there is no local manufacturing of open cell in the country," Kamal Nandi, business head and executive vice president, Godrej Appliances and president, Consumer Electronics and Appliances Manufacturers Association (CEAMA).

Companies could look at revising costs by 2-3.5% depending on the category of TV sets, CEAMA said in a statement.

The cost benefit is expected to be passed on to the customers in immediate to long term depending on respective brand’s inventory, it added.

“While a substantial portion of the demand for TVs is being met through local production, the option of sourcing from FTA countries remains a threat. The reduction in open cells duty will help in arresting this and thereby safeguard investments made in India by providing a level playing field for domestic manufacturers," Nandi added.

India’s LED TV market is estimated at 15 million units.

The announcement comes at an opportune time considering the flat growth that TV’s have witnessed in the last year, said Manish Sharma, president and CEO, Panasonic India and South Asia.

Sharma added that since open cells form a major share of the total manufacturing cost of TV’s, the company could consider passing about 3-4% reduction in price to consumers.

In the same notification, the ministry has also scrapped customs on goods for use in the manufacturing of liquid crystal display (LCD) and diode (LED) TV panels such as film, printed board assembly (PCBA); and cell (glass board/substrate).

The move comes ahead of the festive season and at a time when TV manufacturers have been complaining of a slump in demand amid a general consumer slowdown, heightened competition and increased GST on large TV sets.

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