The GST rate on mobile phones in India has been a topic of discussion since its announcement by the government. While most people are aware that the new GST rate is 18%, there seems to be a lack of clarity on how it will impact the price of mobile phones in the market. In this article, we aim to provide you with everything you need to know about the new GST rate on mobile phones.
What is GST?
To begin with, let’s understand what GST is. Goods and Services Tax (GST) is an indirect tax that was introduced in India on 1st July 2017. It replaced multiple taxes such as Central Excise Duty, Service Tax, Value Added Tax (VAT), etc., making the taxation process simpler and more transparent.
What is the New GST Rate on Mobile Phones?
The GST council, on 14th March 2020, had increased the GST rate on mobile phones from 12% to 18%. The new GST rate came into effect on 1st April 2020. Prior to the hike, the GST on mobile phones was 12%, which was applicable to both smartphones and feature phones.
How Does the New GST Rate Impact Mobile Phone Prices?
The increase in GST rate has impacted the prices of mobile phones, and consumers have to shell out more money to purchase their favorite devices. Mobile phone manufacturers have had to revise their prices, factoring in the new GST rate, resulting in an increase in prices across the board.
Consumers who were planning to upgrade their devices might have to think twice, as the increased prices might pinch their pockets. This might also lead to a delay in new smartphone launches, as manufacturers might face a dip in demand due to the price hike.
Are There Any Exceptions to the New GST Rate on Mobile Phones?
Yes, there are exceptions to the new GST rate on mobile phones. Recently, the government announced that the GST on mobile phones made in India will remain at 12%, while imported devices will attract the increased GST rate of 18%.
This move is expected to give a boost to local manufacturing, promote the ‘Make in India’ initiative, and bring down the import bill of the country. With the increased demand for Mobile phones, it is an excellent opportunity for local companies to step up and fill the gap.
Conclusion
The new GST rate on mobile phones has come into effect recently, and it has resulted in an increase in the prices of mobile phones. While consumers might have to pay more, this move is expected to promote local manufacturing and help in reducing the import bill of the country. Nevertheless, the people who are willing to purchase mobile phones need to bear in mind the increased price of devices and have to act accordingly. As of now, depending on the consumers’ choice and preference, the outcomes shall depend.
