Hyderabad: Mobile phone maker Samsung on Friday said the Budget proposal to increase excise duty on handsets of above Rs 2,000 will not only push up prices but also hit the trend of consumers shifting towards smartphones.
The company is studying the impact of the excise duty hike announced in the Budget yesterday, Samsung Mobile India Vice-President Asim Warsi said.
"Such a tax increase will have an implication on pricing. We will try on our part to see how to soften the blow for the consumer and see how not to pass on the entire burden, because the burden is significant," Warsi told reporters on the sidelines of a company event here.
Warsi said the hike is not desirable as the country's mobile phone market is passing through an up-gradation cycle.
"Specifically if you look at the upgrade cycle that the country is poised for, towards smart phone, which necessary does not come at bottom of the end of price. They are in the middle or higher. So it is for sure is going to put a bit of a check on upgrade cycle."
"Not just devices and consumer affordability of the phone, even the rolled out networks and deployments done in 3G networks will get affected with that kind of pricing," he added.
Finance Minister P Chidambaram proposed to hike excise duty to 6 per cent on cellphone handsets costing above Rs 2,000. This would increase prices of handsets in a range of Rs 120 to Rs 3,000 (for a device costing Rs 50,000). Mobile phones at present attract 1 per cent excise duty.
Another senior official of the Korean electronics giant said the company may take a decision with regard to handset price increase by next weekend. "We are working out on to how much to be absorbed and how much to be passed on to the consumer," the official said.
Samsung Director (IT Business) Uday Bhat said the firm aims to become a global leader in the enterprise market.
This year Samsung aims to represent 10 per cent of its enterprise business in South-west Asia and by 2020, the company expects B2B to represent 25 per cent of its global revenues, Bhat added.
First Published: Friday, March 01, 2013, 23:47