NEW DELHI: The Government today announced a 'restructure' of the excise duty on all categories of mobile handsets. Under the new formula, the rates will be 6 per cent with CENVAT credit or 1 per cent without CENVAT credit.

Finance Minister P Chidambaram said the measure had been taken to encourage domestic production of mobile handsets and reduce the dependence on imports.

India BlackBerry MD Sunil Lalvani issued a statement saying, "As always, the interim budget focus has been to sustain growth and bring about stability of the economy by way of addressing fiscal deficit and inflation."

He further added, "In a growing mobile market like India, where the telecom sector contributes nearly 3 per cent to the GDP, any positive amendment to the tax structure to reduce costs can consequently spur growth and bridge the growing urban-rural divide. Overall, I think the finance minister has aimed something of a balancing act to manage this year's fiscal budget. The need to foster growth has been the top priority."

Homegrown handset maker Intex also conveyed their view through the spokesperson. Intex business head – mobiles Sanjay Kumar Kalirona said, "In the context of the recent Union Budget revelations, the revision of excise duties on mobile handsets is a visionary step toward ramping up domestic manufacturing. Looking at the present scenario, the rise in excise duty, for the sub-2k category, to 6 percent with CENVAT credit, from 1 per cent the year before could lead to an increase in the overall cost of mobile phones priced below Rs 2000 as mobile handsets are largely imported."

During the budget 2013-14 speech last year, the hike in excise duty to six per cent was announced on mobile phones costing Rs 2,000 and above.