CBIC Circular: Display Assembly Customs Duty Insights

The Circular issued by the CBIC addresses the Customs duty applicable to the Display Assembly of cellular mobile phones.

Under S. No. 5D of notification No. 57/2017-Customs, the concessional basic custom duty (BCD) rate of 10% is provided for Display Assembly used in manufacturing cellular mobile phones, with a Nil BCD rate on inputs or parts for such assembly.

Despite clear guidelines, misdeclaration of Display Assembly imported as parts has been reported, leading to investigations by the Directorate of Revenue Intelligence (DRI). The Ministry of Electronics and Information Technology (MeitY) shared a Technical Document to aid assessment, but misdeclarations persisted.

To address interpretational challenges, Circular No. 14/2022-Customs was issued, followed by reduced BCD rates on certain parts. However, ambiguities remained, prompting MeitY to request further clarification.

Based on MeitY’s request and the Committee’s recommendations, the Circular clarifies the constituents of the Display Assembly and the applicable BCD rates. Notably, certain components integrated with the assembly warrant the 10% BCD rate, while others do not.

These clarifications aim to streamline classification and ensure appropriate duty treatment for Display Assemblies of cellular mobile phones.