Government may impose basic customs duty on electronic hardware items

NEW DELHI: A government committee is exploring the possibility of imposing a basic customs duty on a few electronic hardware items, which are not part of the obligatory zero customs duty list under World Trade Organisation’s information technology pact signed in 1996.

Concurrently, the panel, headed by the secretary of department of electronics and information technology (Deity), is also aiming at correcting the inverted duty structure in the electronic hardware sector, according to internal documents related to a meeting of the committee, and seen by ET. The committee also has some commerce ministry officials as its members.

The latest move by the government aims to promote domestic manufacturing of electronic hardware. The inverted duty structure — under which the raw material is taxed at a higher rate than finished goods — had been discouraging local manufacturing in the sector as the duties would increase the cost of an electronic hardware item made in the country compared to a direct import of that item.