The Department of Telecommunications (DoT) wants the Ministry of Finance to continue with the ten per cent customs duty on specified telecom products as projected in the Union Budget 2014. DoT is of the view that the imposition of the customs duty will increase the competitiveness of the domestic manufacturers who lack the required infrastructure and suffer from the inverted duty structure.
The telecom products including 2G, 3G and 4G network gear such as switches and broadband systems are excluded from the list of items covered under the Information Technology Agreement (ITA), 1997. Therefore, these items are not liable to be duty free under the ITA. Also, DoT believes that such an imposition would not hurt the confidence of the foreign investors and manufacturers.
On the other hand, the telecom industry believes that the customs duty will not bring significant improvement in the domestic telecom product manufacturing as most of the imported network gear is IP protected and cannot be manufactured domestically.
