With 6% excise duty Mobile phones will get costlier

As per the Annual Budget the excise duty has been increased and now at 6% on handsets that are priced over Rs. 2000. So get ready to pay more if you are planning to buy a smartphone.

Having said that the excise duty is applicable for companies manufacturing the handset in India, like Samsung and Nokia. It will not affect companies that import handsets like Lava, Micromax, Spice etc to name a few. Well as you all know most of the phones are manufactured (in china), rebranded and then exported to India (which will attract import duty in India).

Such companies need to pay the import duty which remains unchanged and hence the prices of such handsets will be the same. This is definitely bad news for brands that are manufacturing the handsets.

The Excise duty on mobiles was just 1% before and now increased by 5%, total 6%. The handsets that are priced under Rs. 2000 will not attract the duty. I guess most of the users are looking for low cost brands like Micromax and some Chinese players who are eagerly waiting to set their base in India.

With bigger brands getting pricy, we will find more and more users shifting to other brands.

Update : The company that are importing the handsets from China that are re-branded and then sold in India will also need to pay the excise duty.  So in call the prices are going to increase.