MUMBAI: Following the uproar after the union budget proposed imposing 10 per cent import duty on telecom products not covered under Information Technology Agreement (ITA) 1 of WTO to boost domestic production of telecom products, media reports suggest that the Department of Telecommunications (DoT) wants the Finance Ministry to retain the 10 per cent customs duty on specified telecom products as proposed in the budget.

According to a report in Economic Times, a letter written by the DoT to the revenue secretary said, “Imposition of customs duty on specified telecom products will create a level playing field for domestic manufacturers who suffer severe disability due to poor infrastructure and inverted duty."

India is a signatory of ITA 1 as a member of World Trade Organisation. Under the pact, member countries should allow duty free import of products falling under eight categories covering telecom, computers and semiconductors like mobile phones and electronic chips.

The telecom products mostly fall in the category of 2G, 3G as well as the 4G equipment, including switches and broadband equipment. These products are outside the list of about 220 electronic items on which India has a zero duty commitment under the World Trade Organisation's Information Technology Agreement (ITA-1).  

The Government, also, recently declared set top boxes as a part of telecom network. The move exempts STBs from various taxes and duties, bringing down prices, which the government hopes to pass on to consumers. In the first and second phase of cable digitisation, imported STBs accounted for about 95 per cent market share.  

The letter also added that “India is under no obligation to allow duty free imports of items not covered in ITA-1.”