GST on Mobile Phone and Mobile Accessories in India: In this blog, we primarily explain the GST rate on mobile phones, GST on mobile accessories and whether we can claim GST on mobile phones as input tax credit.
GST Impact on Mobile Phones:
By bringing all goods and services under a single taxation system GST has served as a major transformation tool for the Indian economy. GST is applicable on all mobile phones whether it is a smartphone or a feature phone and accessories, without exemption
GST on Mobile Phones:
The rate of GST on mobile phones and accessories was increased from 12% to 18% with effect from 1st April 2020 at the 39th GST Council meeting. Budget 2023 also proposed an increase in the prices of mobile phones, such measures increase the prices of mobile phones
GST Rate on Mobile Phones and Accessories:
Under GST, a uniform rate of 18% is charged across the country. The GST rate on mobile phones and accessories is covered under HSN chapter 85. The related HSN code is 8517. Rates are given below as follows:
|Speaker, headphones, earphones||8518||18%|
|Tempered glass screen protector||7007||18%|
|Plastic screen protector||3919||18%|
Changes in GST Rates for Mobile Phones and Accessories
The implementation of the Goods and Services Tax (GST) in India brought significant changes to the taxation system, including the rates applicable to mobile phones and accessories. Initially, mobile phones were placed in the 12% GST tax slab, but in an effort to boost affordability and promote digital connectivity, the government later reduced the GST rate to 5%. This reduction had a positive impact on the prices of mobile phones, making them more accessible to a wider range of consumers. Similarly, the GST rates for mobile accessories also underwent revisions. Essential mobile accessories, such as chargers and earphones, were typically classified under the 18% tax slab, but some luxury accessories were taxed at a higher rate. The distinction between essential and luxury mobile accessories played a role in determining the applicable GST rate. These changes in GST rates aimed to enhance affordability, foster digital inclusiveness, and promote domestic manufacturing in the mobile phone and accessories industry. Businesses in this sector needed to adapt to the revised rates, which had implications for pricing, compliance, and supply chain management. The changes in GST rates for mobile phones and accessories reflected the government’s commitment to making technology more accessible and affordable for Indian consumers, while also supporting the growth of the domestic mobile manufacturing industry.
Impact of GST on Mobile Phone Prices
The implementation of the Goods and Services Tax (GST) in India has had a significant impact on mobile phone prices. The previous tax structure imposed multiple taxes such as Value Added Tax (VAT), excise duty, and customs duties, leading to price disparities and increased compliance complexities. However, with the introduction of GST, a unified tax structure was established, bringing uniformity in tax rates across the country. Mobile phones were placed under the 18% GST slab, which helped reduce the overall tax burden on consumers. The elimination of cascading effect and the availability of input tax credits (ITC) further contributed to cost savings for consumers. Manufacturers and retailers could claim ITC for taxes paid on inputs, enabling them to offset their tax liabilities and pass on the benefits to consumers through reduced prices. Overall, GST has played a pivotal role in streamlining taxation and reducing the cost of mobile phones for consumers in India.
Frequently Asked Questions (FAQs)
Q: What is the GST rate on Mobile phones?
Ans: The GST rate is 18% on Mobile Phones in India.
Q: ITC (Input tax credit) can be claimed on mobile phones?
Ans: If the mobile phone is purchased for Business purposes only than only ITC can be claimed.
Q: What is the type of GST when I buy a mobile phone?
Ans: For example, if Mr. A purchases a mobile phone from a dealer located within the state/Union Territory, he will have to pay CGST at 9% and SGST at 9%. If he purchases a mobile phone from an outside state/Union Territory, he will have to pay IGST at @18%, e.g. an e-commerce vendor.