Budget 2014 Impact: Mobile Phone Prices May Go Up

NEW DELHI: Consumers may have to shell out more money for buying mobile phones as the government has proposed education cess on imported electronic products.

The move may push up costs of handsets by up to 8 per cent, especially smartphones that are mostly imported, analysts said.

Presenting his maiden Budget today, Finance Minister Arun Jaitley said the demand for electronics is growing very fast.

He said the government will "exempt all inputs/components used in the manufacture of personal computers from 4 per cent special additional duty (SAD) and impose education cess on imported electronic products to provide parity between domestically produced goods and imported goods".

According to the Budget document, the education cess for all taxpayers will be 3 per cent in the 2014-15 fiscal.

Reacting to the proposal, IDC South Asia VP and General Manager Jaideep Mehta told PTI: "The education cess on imported electronics, including PCs and Smartphones, will challenge consumption growth as it will increase street prices."

Greyhound CEO Sanchit Vir Gogia said manufacturing is still in nascent stages in India.

"There is hardly any manufacturing that is done in the country. Considering that most handsets are imported and add to that the education cess, we could see prices going up as much as 7-8 per cent," he added.

Handset makers including Microsoft Devices (Nokia) and Micromax however did not comment on the impact on prices.

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Source: PTI