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Circular No. 06/2024-Customs
CBIC-190354/190/2022-TRU Section-CBEC
Government of India
Ministry of Finance
Department of Revenue
Tax Research Unit
***
North Block, New Delhi
Dated, 7th June, 2024
To
All Principal Chief Commissioner/Chief Commissioner of Customs/Customs (Preventive).
All Principal Chief Commissioner/Chief Commissioner of Customs & Central Tax
All Principal Commissioner/ Commissioner of Customs/Customs (Preventive).
All Principal Commissioner/Commissioner of Customs & Central Tax
All Principal Director Generals/Director Generals under CBIC
Subject: Customs duty on Display Assembly of a cellular mobile phone-reg
Madam/Sir,
Reference is invited to S. No. 5D of notification No. 57/2017-Customs dated
30.06.2017 that provides a concessional basic custom duty (BCD) rate of 10% for Display
Assembly for use in manufacture of a cellular mobile phone and a Nil BCD rate on inputs or
parts for use in manufacture of a Display Assembly for use in manufacture of a cellular mobile
phone.
2. While the notification No. 57/2017-Customs clearly prescribed the applicable BCD
rates on Display Assembly of cellular mobile phone and its parts, instances of misdeclaration
of Display Assembly imported as parts were reported. On request, the Ministry of Electronics
and Information Technology (MeitY) shared a Technical Document, vide O.M. No. W-
14/2/2020-IPHW dated 23.09.2020 that provided the prominent constituents of a Display
Assembly of cellular mobile phones which was shared with the field formations for ease of
assessment.
3.
However, misdeclaration, as above, seems to have continued in certain cases, which
were intercepted by Directorate of Revenue Intelligence (DRI) and other field formations, with
issuances of demand notices in a few cases recently. In the wake of the investigation by DRI
and other field formations, the industry has made representations to MeitY for intervention in
the matter. As per the request from MeitY, Circular No. 14/2022-Customs dated 18.08.2022
was issued to provide clarity regarding the parts of display assembly and its interpretation.
4.
Thereafter, MeitY has again highlighted that the matter is still not resolved, and there
are interpretational challenges still being faced by the industry with respect to interpretation of
display assembly. MeitY stated that the concessional BCD rate of 10% is not being extended
to display assembly by classifying it as others based on the interpretation of the technical
document dated 23.09.2020 and the circular No. 14/2022-Customs dated 18.08.2022.
5.
Thereafter, on the request of MeitY, the applicable BCD rate on “mechanics”, die-cut
parts”, other parts of cellular mobile phone falling under tariff item 8517 79 90” for use in
manufacture of cellular mobile phone was reduced to 10% vide notification Nos. 08/2024-
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Customs and 09/2024-Customs dated 30.01.2024. Thereafter, MeitY has conveyed that while
the notifications gave prospective clarity with respect to extension of concessional BCD rate
of 10% for display assembly, the issues exist regarding the interpretation of display assembly
for the past period.
6.
MeitY has particularly raised issues of ambiguity in the interpretations of Circular No.
14/2022-Customs dated 18.08.2022, and requested DoR to examine the interpretation of
display assembly of cellular mobile phone as per circular No. 14/2022-Customs dated
18.08.2022, by considering a revised list of items that are included/excluded from the display
assembly of a cellular mobile phone. The matter was examined by a Committee constituted
with officials from both CBIC and MeitY, which recommended a principle that may be used
to determine the interpretation of display assembly for extending the concessional BCD rate.
7.
Thus, in partial modification of circular No. 14/2022-Customs dated 18.08.2022, based
on the request of MeitY, recommendation of the Committee for the clarifications on
Interpretation of the Display Assembly of Mobile Phones and in exercise of the powers under
Section 151A of the Customs Act, 1962, it is hereby clarified as under:
(i) The Display Assembly of a cellular mobile phone consists of the combination of following
parts/components:
a) Touch Panel
b) Cover Glass
c) Brightness Enhancement Film
d) Indicator Guide Light
e) Reflector
f) LED Backlight
g) Polarizers
h) Mounted OLED / LCD Driver IC for Display
i) FPCs/FPCAs (flexible printed circuit board assembly) fabricated, embedded, fitted or attached
to the display
j) LCM (Liquid Crystal Module or LCD Module) [which consist of LCD (Liquid Crystal Display)
Cell / pure Cell, or FOG (FPC on Glass), or COG (Chip on Glass)] or OLED Module
k) Sensor(s) which are integral part of the display e.g. Fingerprint Sensor, Touch Sensor which
have been fabricated, embedded, fitted or attached in the display assembly at the time of
assembly / manufacturing of display assembly
(ii)
If the display assembly is imported with the following items/components which are
fabricated, embedded, fitted or attached with the assembly, the whole integrated assembly
should also be treated as a Display Assembly of a cellular mobile phone, attracting a BCD rate
of 10%:
a) Frame / Support structure including front, back, or side - any form / material). Support frame
may include hooks, fangs, and integrated sockets
b) Receiver Mesh, Speaker Net
c) Foam, sticker, protective film, mylar, conductive cloth
d) SIM Socket
e) SIM Tray
f) Antenna Pin
g) Side Keys like power key, slider switch, volume button
(iii)
Display Assembly of a cellular mobile phone may be imported with or without the items
listed at (a) to (c) in para 7 (ii) above. Although, these items/components have no essential
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function in display and only perform auxiliary function of providing strength, support,
protection from dust, acting as adhesive material, protection from scratches, and structural
stability, the attachment of these items on the display assembly does not alter the essential
characteristic of display in any manner, and the assembly would continue to be treated as a
Display Assembly of a cellular mobile phone. Further, the items listed at (d) to (g) in para 7(ii)
above viz. SIM Socket, SIM Tray, Antenna Pin, Side Keys like Power Key, Slider Switch and
Volume Button are not part of the Display Assembly of mobile phone. These may or may not
come (fabricated, embedded, fitted or attached) with the display assembly depending upon the
design of the display assembly. However, even if these items/components are imported as an
integrated part (already fabricated, embedded, fitted or attached to the assembly) of the Display
Assembly of a cellular mobile phone, the assembly continues to be a Display Assembly of a
cellular mobile phone and a BCD rate of 10% shall be applied on the whole integrated
assembly. However, if the items/components listed in (a) to (g) in para 7 (ii) above are imported
individually, they will attract the BCD rate as applicable.
(iv)
However, if the following items are fabricated, embedded, fitted or attached with the
display assembly of a cellular mobile phone, then the benefit of BCD treatment provided to
display assembly would not be available to such assembly. Then such assembly is to be treated
as a general part of cellular mobile phone attracting BCD rate as applicable:
▪
Printed Circuit Board Assembly (PCBA) of mobile phone [except Mounted OLED /
LCD Driver IC for Display & FPCs/FPCAs (Flexible Printed Circuit Board Assembly)
for the purpose of display]
▪
Main lens for feature phones
▪
Housing of mobile phone (excluding Frame/Support structure including front, back, or
side- any form/material for display assembly)
▪
Speakers
▪
Charger / Adapter
▪
Battery Pack
▪
Wired Headset
▪
Microphone and Receiver
▪
Camera Module
▪
Vibrator Motor / Ringer
▪
Key Pad of feature phone
▪
USB Cable
8.
Difficulty faced, if any, in the implementation of the instructions, may be brought to
the notice of the board.
Hindi version will follow.
Yours faithfully
Vinay V Nayak
Technical Officer
