GST Jhatka!Prices of smartphones will rise,online buying costly too

National | May 19, 2017, 10:38 a.m.

New Delhi: GST is not good news for the smartphone-crazy young generation. With government deciding to impose 12% goods and services tax (GST) on mobiles, the prices of most mobiles will rise across the country.  

The price rise may vary from 4% to 5%. The prices will rise as after implementation of GST, the government will take away the duty benefit that government was giving to domestic mobile makers.


"29 out of 36 VAT jurisdictions in India (29 States and 7 Union Territories) have VAT rate on mobile phones of 5 per cent along with 1 per cent excise duty; thus, the total incidence is 6 per cent currently in most parts of the country," Economic Times quoted Indian Cellular Association president Pankaj Mohindroo as saying."GST at 12 per cent will cause 4-5 per cent increase in prices in most geographies, therefore 5 per cent GST rate recommended by the IT and electronics ministry is the most appropriate rate," Mohindroo added.


"29 out of 36 VAT jurisdictions in India (29 States and 7 Union Territories) have VAT rate on mobile phones of 5 per cent along with 1 per cent excise duty; thus, the total incidence is 6 per cent currently in most parts of the country," said Pankaj Mohindroo, president of Indian Cellular Association that represents handset makers including Apple, Samsung and Micromax among other.

"GST at 12 per cent will cause 4-5 per cent increase in prices in most geographies, therefore 5 per cent GST rate recommended by the IT and electronics ministry is the most appropriate rate," he added.


Currently, the duty is from 17% to 27% on mobile phones imported and sold in India, this will now come down to 12 per cent. The prices of phones, which were made in low VAT states , wil now increase as they will have to charge 12% GST.

Immediate victim of this will be the iPhones made in Bengaluru. It was expected that the prices of these Made in India will iPhones will come down, but they will now be sold at higher rates.


"Prices of phones that are imported into India are likely to go down, while those made locally may go up in cases where they are being made from low VAT states like Karnataka," Economic Times quoted E&Y partner Bipin Sapra as saying.

The worst part is that online shopping for smartphones will be costly. That's because Amazon, Flipkart, Snapdeal, Shopclues and others buy mobiles from low VAT states, primarily Karnataka, where the inidence of tax will rise after GST

News24Bureau


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