Tuesday, November 12, 2013: If reports are to be believed, the government is planning to impose customs duty up to 17.5 per cent on select wireless telecommunication equipment that are being used for 3rd and 4th generation mobile networks. This is being done with an aim to encourage domestic manufacturing of information technology (IT) products and bring down India’s dependency on imports.
India had signed the first Information Technology Agreement (ITA-1) under the World Trade Organization, as part of which customs duty was removed on many technology products.
However, the government feels that some telecommunication equipment were not covered under the agreement and so it can levy customs duty on these.
Experts feel that by doing this, the telecom rates will go up for customers and may be of little help to encourage domestic manufacturing, as of now.
According to a Mint report, an inter-ministerial subcommittee in a meeting held last month identified telecommunication products such as dense wavelength division multiplexing, ethernet switch routers, gigabit packet optical networks and packet transport nodes for higher customs duty, according to an internal department of telecommunication (DoT) memo reviewed by Mint.
Further, at a meeting it was suggested by the commerce department that the IT products named by the inter-ministerial sub-committee were not there in the year 1997 when India had signed ITA-1. So India can impose duty on these products without any fear of retaliatory measures.
