Apple & Xiaomi Increase Mobile Prices Due to Hike in GST rates

The mobile sector saw a hike in the rates of GST (Goods and Services Tax) from earlier 12% to now 18%. Simultaneous to this hike in the GST rates, mobile manufacturing units have increased the prices of their smartphone models. India surpassed the USA to become the second-largest mobile market in the world and an increase in the GST rates on smartphones Check out the GST rate on mobile phones, chargers and its accessories along with HSN code in India. The mobile phone HSN code is 8517 along with 12% GST rate. Read more is not a good sign for the Indian mobile market.

iPhone’s Price Hike

In the scenario, Apple has already increased the price of its end-models twice a month, once when the customs duty was raised by the government and others when the GST on smartphones increased. The company increased the rates by 5% on Wednesday, while in the budget it increased the net import duty by 2% by removing the exemption on social welfare surcharge that was levied on basic customs duty on mobile phones. The surcharge is 20% for smartphones.

iPhone 11 Pro Max (64GB) is rated at Rs. 1,17,100 for sale in the Indian market that was till February Rs. 1,09,900. Another model by apple, iPhone 11 Pro (64GB) is priced at Rs. 1,01,200 that was till February only Rs. 99,900. While the models produced domestically were able to escape from the hike last month (iPhone XR and iPhone 7), they have also increased their price net on Wednesday. iPhone XR is priced at Rs. 52,500 now and iPhone 7 costs Rs. 31,500 to Indian customers now.

Xiaomi Price Hike in India

Chinese mobile vendor, Xiaomi has increased the prices of its Mi and Redmi phones due to the hike announced in GST rates by the government Grab the information of revised GST slab rates on consumer products in India, Although the GST council finalized the slab rates like 5%, 12%, 18% and 28%. Read more. The new set of prices has already been approved and is soon going to be updated on the mi online marketplace (Mi.com). The company said that the hike in the prices of end-models is in line with the increase in GST rates (up to 5%). The company said that the move has been taken after discussions on various aspects and keeping in mind their policy of 5% profit on its smartphones and other hardware products.

New Rates Will be Applicable to all Smartphones of 1 April 2020

Prior to the announcement by FM Nirmala Sitharaman related to increasing in GST rates, India Cellular and Electronics Association (ICEA) warned them of the aftermath of their decisions. As no company will bear the increase in GST rates for mobile phones and all the manufacturers and dealers will increase the prices (to a certain percent) of their smartphones for sale in the Indian market.

Read Also: GST Impact on Mobile Phone Manufacturers in India Grab the knowledge of GST (Goods and Services Tax) impact on mobile phone manufacturers in India. The experts’ opinion puts light on the major areas of affect. Read more

As a result of hike in mobile prices, the consumption rates will go down and the domestic consumption target (of Rs. 6,00,000 crores) by 2025 will be far from achievement as the country will fall short by Rs. 2,00,000 crores.