Locally-made mobile phones get costlier
Locally-made mobile handsets are getting costlier as the government has decided to impose value-added tax (VAT) on mobile phones, manufactured and assembled, and increase import duty for raw materials.
The budget for FY23-24 proposed to increase the value-added tax (VAT) on local mobile phone manufacturers up to 7.5% based on their status.
Local companies which have the Surface Mount Technology (SMT) assembly process along with assembling, will have to face 7.5% in vat instead of 5% from 1 June this year.
Keep updated, follow The Business Standard's Google news channel
Besides, the companies which have power circuit boards (PCB) assembling facility along with the SMT assembly process and battery charger assembly facility and assembling facility, will pay 5% in vat instead of 3%.
On top of this, if any company has additional facilities for power circuit boards (PCB) assembling and mobile housing manufacturing, its VAT rate is 2% from zero.
It also proposed to rationalise some of the conditions of the said notification and add new conditions.
Finance Minister AHM Mustafa Kamal said the government will ease some clauses to import raw materials and micro-parts under the current tax break facility.
The officials said the government has taken this plan to increase VAT and duty on raw material imports of cellular phones in a bid to encourage value addition by local manufacturers.
