KARACHI - The increase in custom duty rates on the import of luxury electronics goods aimed at increasing revenue collection for the year 2008-09, but this step is likely to hamper the sales and promote the smuggling of these items into the local electronics market, dealers opined. In the federal budget 2008-09, the federal government has decided to increase import duty on some 300 luxury items by 15 per cent to 35 per cent to discourage their import in the country. The unnecessary items which fall under the category of 'luxury items' from electronic products include TV sets, air conditioners/refrigerators, mobile phones, electric fans, micro wave ovens, toasters etc. According to the market dealers, amongst all electronics goods, the smuggling of mobile hand sets would rise due to the imposition of customs duty at Rs 500/ per set on import of mobile phone even though it was not unexpected move for the market players but dealers hoarded the old stock and being sold it on new revised prices.     Most of the electronics producing companies had increased the consumer prices of the CBU imported and partially indigenous brands from 2 to 3 percent a month before new budget. These companies may also announce the revised prices of the said products.    Talking to The Nation a dealer said, from all electronics items, the sale of TV sets usually goes on throughout the year but during broadcast of the world's mega sports event being aired on TV these sales receive great momentum however, the sale of air conditioners, refrigerators, fans, and home appliances is seasonal.     In line with increase of 15 to 16 percent sales tax, 2 percent Withholding tax on raw material and import duty from 25 to 35 percent on electronic products would decline the sales business of the respected companies and dealers which ultimately could not cushion the industry and manufacturers but encourage the smuggling of these items into the market. According to the FBR, duty rate on air conditioners/ refrigerators, electric fans, toasters, micro wave ovens, televisions, furniture and lighting equipment etc increased from 25% to 35% while rates on electric ovens/ cooking ranges increased from 20% to 30%. Specified industries/projects have been de-linked from the local manufacturing condition for import of required machinery, equipments and raw materials etc. At present withholding tax rate of 5% and 1% is applicable in respect of commercial and manufacturer importers respectively. It is proposed to apply a uniform rate of 2% for both the categories of importers. As per the salient features of the taxation measures, to generate additional revenue for meeting dire national needs, rate of FED on telecommunication services is being enhanced to 21%.  In order to bring the remaining telecommunication services in the tax net, all telecommunication services has been being subjected to FED except those which are already exempt.Sales Tax Special Procedure Rules, 2007 have been amended giving a procedure for collection of fixed tax at 0.75% of the value of goods at the import and manufacturing stage.