New duties rain on Indians’ TV party

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New duties rain on Indians’ TV party

Travelling to India with a television set will soon become a thing of the past as the Indian government announced plans to impose custom duties on ‘non-essential’ imports.


Muaz Shabandri

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Published: Tue 20 Aug 2013, 11:40 PM

Last updated: Tue 7 Apr 2015, 6:12 PM

This type of scene could be a thing of the past as duty-free import of TV sets into India goes. — KT file photo

Non-resident Indians (NRIs) and Indian tourists going back to India with TV sets would be asked to pay a 10 per cent customs duty and 12.5 per cent countervailing duty as part of the new rules. The move is expected to discourage Indians from spending on non-essential products outside India.

Till now, most Indian expatriates would carry a 32” or 42” TV in their free-baggage allowance as the Indian government was allowing a duty-free import of TV sets up to the value of Rs35,000. However, the new rules, taking effect from August 26, would affect NRIs.

Television sales across the UAE are expected to dip by more than 20 per cent over the next three to six months. The availability of cheap television sets in the UAE, Thailand and Singapore had created a huge market from India as tourists took advantage of the price difference due to the baggage allowance.

“The Indian consumers looked at TV sets as a nice gift for friends or relatives. It was one of the most popular products which one would take back to their home country,” said Ashish Panjabi, chief operating officer for UAE’s Jacky’s Group, a major electronic retailer.

The LCD and LED TV sets by major brands like Samsung, LG and Sony are priced almost 30 to 40 per cent cheaper in the UAE market. The new rules are aimed at reducing the cost-benefit for retail consumers who will end up paying as much as they would for a TV set in the Indian market.

Neelesh Bhatnagar, CEO of Emax Electronics, also expressed concerns over the decision to impose customs duties on TV sets as he said, “With the devaluation of the Indian currency, major electronic manufacturers will also have to increase prices of products in the Indian market.”

Every day, more than 3,000 flat-screen TV sets land at Indian airports. The number increases to almost 10,000 during the sale season and Dubai Shopping Festival (DSF) when special offers are provided to retail customers.

The UAE is a popular tourist stop for Indian residents who look at Dubai as a shopping destination. Electronics and gold products are a hit with this consumer segment.

“We have already seen a dip in the flow of Indian tourists coming to our stores. For any customer taking back an electronic product to their home country, they need to make a saving of at least 25 per cent. Warranty and installation issues also affect the buying sentiment sometimes,” added Bhatnagar.

Sliding Indian rupee has forced economists and policy-makers to take corrective measures and reduce the current-account deficit (CAD).

Taxes on gold imports were also raised for the third time in eight months, again targeting NRIs. The government increased the customs duty by 10 per cent from 8 per cent per 300 grams of the precious metal.

P.K. Abdul Salam, executive director of Malabar Gold & Diamonds, said gold retailers in the UAE would definitely be affected as sales were expected to slump.

“It will definitely affect gold sales in the UAE. The margin of difference when importing gold is very obvious now. Also, some states in India have local taxes which add to the end retail cost,” he said.

Gold is hugely popular in India, especially during religious festivals and wedding seasons, as middle-income families look at gold as a safe investment.

“People are now willing to send money rather than invest in gold because of the falling Indian rupee. It is a dull season and we are hoping sales would pick up during the festive seasons of Eid and Diwali,” added Abdul Salam.

In January 2012, the duty on gold stood at 2 per cent. It has been steadily increasing since then, causing fears of an increase in gold smuggling.

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