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TV prices not to go down in festive season due to duty cut on component

Date: 19-09-2019
Subject: TV prices not to go down in festive season due to duty cut on component
KOLKATA: Television prices are unlikely to come down before the festive season due to scrapping of the 5% import duty on open cell panels, the main component used in LED TV manufacturing.

Though television makers said there would be 2-4% price cut due to this for companies who were continuing to make in India, industry executives said inventory for the festive season has already been manufactured and almost hit the stores and e-commerce sellers where the pricing has been factored after the 5% import levy.

Avneet Singh Marwah, the CEO of Super Plastronics that makes Kodak and Thomson televisions, said no price drop is likely this festive season since all products have been manufactured after accounting for the import levy. “Duty cuts will reflect from November,” he said.

Another senior executive with a leading foreign television brand said the company has its inventory lined up for the festive season and the price cut will reflect when fresh inventory is manufactured in November-December. 

The finance ministry on Tuesday late night issued a notification to scrap import duty on open cell LED panel used in televisions from 5% to zero. The notification issued said “open cell (15.6 inch and above) for use in the manufacture of Liquid Crystal Display (LCD) and Light Emitting Diode (LED) TV panels” has been made nil with immediate effect.

India’s largest television brand, Samsung had exited its Indian TV production since last October due to this 5% duty on open cell imports and started sourcing finished sets from Vietnam at zero levy through the free trade agreement route. More brands were exploring similar options which the industry says will get arrested now.

The industry is also betting on a cut in goods and services tax rate (GST) on large screen televisions from 28% now to 18% during the up-coming GST Council meeting on Friday. The GST cut has also been pushed by the ministry of electronics and IT to the finance ministry. At present, televisions up to 32-inches have 18% GST while those beyond 32-inches are taxed at 28%.

PanasonicNSE 0.98 % India president and CEO Manish Sharma said since open cells form a major share of the total manufacturing cost of televisions, the move will allow us to pass the benefits to the end consumer which would be about 3-4% reduction in price thus providing the necessary thrust to the market.

“To further the push towards affordability for televisions, we would urge the government to also consider revising the GST slabs for televisions above 32 inches from 28% slab to 18%,” he said.

The consumer electronics industry apex body, Consumer Electronics and Appliances Manufacturers Association (CEAMA), estimates almost 15 million LED television sets are sold in India in a market valued at about Rs 40,000 crore.

Television sales had flattened out this year with consumers postponing purchases expecting a GST cut on televisions, due to poor sentiments and also consuming audio-visual content on their smartphones. CEAMA estimates that the LED TV industry is one of the biggest employers with almost 50,000 people directly involved.

Kamal Nandi, president of CEAMA and business head of Godrej Appliances, said the tax amendment shall provide the necessary boost to the Government’s ‘Make in India’ and attract potential investors. “CEAMA will work closely with government to formulate and facilitate phased manufacturing of TVs and end-to-end manufacturing of televisions in the country,” he said.

Source: economictimes.indiatimes.com

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