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Mobile phone prices likely to increase soon due to rising component costs

Highlights

  • Cost of mobile phones in India is likely to increase soon
  • The price hike will be due to an increase in the cost of components
  • Nothing has already increased Phone (1)’s price due to rising component costs

The cost of mobile phones in India is likely to increase in the coming days in India. The tax levied on the components used in mobile phones is expected to increase. This will eventually increase the price of the devices.

The news has surfaced at a time when Chinese smartphone OEMs such as Xiaomi, Vivo India, and Oppo have reportedly been accused of tax duty evasion. These companies have claimed that this transpired due to unclear information available on the customs duty charges for the key components of mobile phones. The detailed information released by the Central Board of Indirect Taxes and Customs (CBIC) has imposed a 10 percent customs duty on the display assembly. The phone company will be charged an additional 5 percent for other components imported with the display assembly.

Also Read:Massive discounts on iPhone 11, iPhone 12 and iPhone 13, check the latest prices here

Phone price increase

Mobile phone prices likely to increase soon due to rising component costs

The report states that CBIC has levied 10 percent of basic customs duty, which the smartphone OEMs will have to pay if they import the display assembly along with the back support frames for a smartphone. However, if the company imports items like antenna pins, power buttons, and other parts along with the display assembly, the customs duty will go up by 5 percent. In total, the company will be charged 15 percent for the display assembly and the other components that are imported with it.

“If any other item like the sim tray, antenna pin, speaker net, power key, slider switch, battery compartment, Flexible Printed Circuits (FPCs) for volume, power, sensors, speakers, fingerprint etc, come fitted along with a display assembly with or without a back support frame of metal/plastic, then the whole assembly attracts a BCD rate of 15 per cent,” the CBIC said.

If display assembly comprises extra parts, it will be considered a violation of the exemption notification, CBIC added. However, the industry is of the view that all the components that are fixed to the display content on mobile should be considered as a display assembly. As a result, the customs duty should be reduced to 10 percent, claims the industry.

According to MeitY (Ministry of Electronics and Information Technology), the display assembly comprises the screen panel along with components and sub-components. It went on to say that the display assembly includes things like a touch panel, cover glass, gloss enhancement film, indicator guide light, reflector, LED backlight, polarizers, and an LCD controller mounted on a flexible printed circuit (FPC), among other things.

Recently, Nothing India increased the price of the Nothing Phone (1). It is now available with a revised starting price of Rs 33,999. Nothing India Vice President Manu Sharma said that the price hike is due to the fluctuating currency exchange and rising component costs. It appears that other phone brands may increase the price of some of their smartphones sooner or later.

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Anvinraj Valiyathara

Anvinraj has been writing about smartphones and other gadgets for over 10 years, with 10,000+ articles published to date. He owns a POCO X3 Pro and Realme X7 Max 5G. His interests include exploring new places, reading, photography, and church activities. At Pricebaba, he covers breaking news and features.