Kolkata: The finance ministry has clarified that routers will continue to enjoy zero import duty status, allaying concerns among telecom operators about the critical IT and network communications device attracting basic customs duty (BCD) from this month and, in turn, pushing up 4G network expansion costs and hitting 5G deployments.“A finance ministry notification, dated December 30, has assigned a new harmonised system (HS) code (No: 8517 62 90) for routers to continue their zero customs duty status,” said a senior executive with direct knowledge of the matter. ET has seen a copy of the notification issued by the revenue department.An HS code is a multipurpose international goods nomenclature used as the basis of customs tariffs. It also defines a product for the purpose of international trade.Telcos had urged the finance ministry to clear the air on whether routers would attract BCD after the government reclassified the device under the Finance Act (No. This had triggered uncertainty over future purchases and associated import costs of these devices for procurements from overseas vendors.Rajan Mathews, director general of the Cellular Operators Association of India (COAI), which represents India’s telcos and overseas network vendors, had said routers were a critical link to the country’s digital communications infrastructure.He had also urged the finance ministry to maintain the sanctity of ITA-1and ensure routers remained exempted from BCD since India is a signatory to the WTO pact. Any potential imposition of BCD on routers, he had said, would hurt telcos and have significant financial implications on timely implementation of Digital India programme.

Source: Economic Times January 02, 2020 00:00 UTC