GST overhaul: Will your smartphones get cheaper? Here's what you must know

The Centre’s latest Goods and Services Tax (GST) rationalisation exercise has reshaped India’s indirect tax landscape, but mobile phone buyers will not get any benefit out of this move. The GST Council has decided to keep the rate on mobile phones unchanged at 18 per cent, even as other sectors saw sharp cuts.

 

While smartphones remain taxed at 18 per cent, other products have gained from the revisions. Air conditioners and refrigerators, earlier taxed at 28 per cent, will now attract 18 per cent GST. Monitors and projectors have also moved to the 18 per cent slab from higher rates.

 

 

Two-slab GST structure replaces four tiers 

The earlier four-tier structure of 5 per cent, 12 per cent, 18 per cent and 28 per cent has now been replaced with two rates—a merit rate of 5 per cent and a standard rate of 18 per cent. A special 40 per cent rate has been reserved for luxury items and demerit goods, including high-end cars, tobacco, liquor and online betting.

 

Smartphone makers pushed for lower slab

 

Smartphone manufacturers had been seeking a reduction in GST on mobile phones from 18 per cent to 5 per cent, arguing that this would boost demand and make devices more affordable. The India Cellular & Electronics Association (ICEA) said mobile phones are no longer luxury items but essential tools for education, financial inclusion and access to government services. The industry body argued that a rate cut would benefit both manufacturers and consumers.

 

Sitharaman calls move structural reform

 

Finance Minister Nirmala Sitharaman described the reform as a “structural reform” that will ease compliance for businesses and consumers. “These reforms have been carried out with a focus on the common man. Every tax on the common man's daily use items has gone through a rigorous review, and in most cases, the rates have come down drastically,” Sitharaman said.

 

Rationalisation eight years too late: Chidambaram

 

The Congress on Thursday said the government had ignored repeated warnings from the party and economists that the GST’s design and initial rates were flawed. Former Union minister P Chidambaram said the rationalisation and reduction of rates were welcome, “but one is left with the thought that these steps are eight years too late”.

 

The revised GST rates, except for pan masala, gutkha, cigarettes, chewing tobacco products, unmanufactured tobacco and bidi, will take effect from September 22, the first day of Navratri.