Telcos have sought clarification from the finance ministry on whether routers will be attracting import duty from January 1, 2020.
At present, the router does not attract any basic customs duty. It is a part of the 200 items that come in the Information Technology Agreement (ITA-1) of the World Trade Organisation (WTO) under which India has committed to eliminate customs duties.
However, the government reclassified routers under the Finance Act (No. 2), 2019, and the Central Board of Indirect Taxes and Customs has set January 1, 2020, as the implementation date for the new clauses.
As per the Cellular Operators Association of India (COAI), this levy would raise the cost of 4G network expansion, preventing cost-effective deployment of the upcoming 5G ecosystem and make mobile broadband services unaffordable to users.
Further, as per the telcos, such a levy would run afoul of India’s obligations to the WTO.