New GST Rate on Mobile Phones Going to Hurt the Industry: Experts

Finance Minister Nirmala Sitharaman, head of Goods and Services Tax (GST) Council, on Saturday announced that the GST Impact on mobile phones 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 will be increased from the current rate of 12% to 18%. The rate is said to be applicable from April 1, 2020. The increase in rates is said to affect the country’s smartphone industry badly. The change will hit the market harder which is already facing a shortage of supplies from China because of the outbreak of Coronavirus.

“They will, most certainly, decide to pass it on to the consumer, at least in case of high-selling models,” said Navkendar Singh, Research Director, IDC India. The Managing Director (MD) of Xiaomi India, said that the decision to increase in rate will make the industry crumble. He also said that the industry, which is already fighting with profitability due to the weakening of Rupee against Dollar making the imports expensive, will suffer even more due to the rise.

Read More: GST Impact on Indian Telecom Industry The Telecom industry professionals say that the Indian government should focus to reduce the tax percentage in GST. View the details of its impact. Read More

“We request the Honourable Prime Minister and Finance Minister to reconsider this. At least for people who cannot afford to buy expensive phones,” Jain tweeted. The India Cellular and Electronics Association (ICEA) said that the decision will hamper the consumption of Mobile Phones. “The 6 percent GST increase will be detrimental to the vision of ‘digital India’. Consumption will be stymied and our domestic consumption target of $80 billion (Rs. 6,00,000 crores) by 2025 will not be achieved. We will fall short by at least Rs. 2,00,000 crores,” said Pankaj Mohindroo, ICEA Chairman.

The government’s decision to transfer the rate of GST on mobile phones 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 to the highest slab was said to be taken to check the inverted duty structure in the mobile industry. The interest charged on components of smartphones (currently 18%) and the price of smartphones (Currently 12%) is unified for ease. N.K. Goyal, president of Telecom Equipment Manufacturers Association of India, said that the proper method to unify the rates was to reduce the rate of GST on components to 12%. The India Cellular and Electronics Association (ICEA) had already suggested in the letter dated 12 March to Finance Minister Nirmala Sitharaman that any increase in tax will “adversely affect” the Make In India campaign and the digital payments of the country.