Boon or Bane: How GST will affect Indian Smartphone Market?

The Goods and Services Tax (GST) roll out is just around the corner. The GST will be implemented from July 1 across the country. The bill was passed in Lok Sabha last year. The GST will ease the taxation process for the government as it will bring one centralised tax slabs. It will eliminate the different number of indirect taxes that are imposing currently.

As of now, the impact of GST on the prices of smartphones or the consumer electronics products is unknown. We will learn more about this once the GST will be implemented. Recently, a report from BGRIndia has provided some details about the upcoming tax slabs and expected impact on the price of smartphones in India.

How GST will affect Indian Smartphone Market?

The report mentioned speculations from the industry experts. According to Neil Shah, who is the analyst at Counterpoint Research said that the GST is revolving around the Make in India and Digital India initiatives. To drive the success for Digital India, smartphones are the key. The government is promoting the importance of digital currency in the form of UPI (Unified Payments Interface) based apps, mobile wallets, and USSD, and Bharat QR-based mobile banking.

How GST will affect Indian Smartphone Market?

GST on Smartphones

The GST is speculated to bring a tax slab of either 12 or 18 percent. Shah emphasised that the government should set local tax norms if possible and offer tax refunds to OEMs which are part of the Make in India program. The smartphones, PCs, tablets, and accessories should come under a lower tax slab with either 12 percent or 18 percent as they will play a major role in the development of Digital India and Make in India programs.

Also Read: How the newly passed GST will impact your tech life in India?

Moreover, the GST roll out will be beneficial for the brick-and-mortar stores to deal with the unfair pricing methods of online retailers. It will bring standardised taxation which will reduce the price difference between online and offline stores.

How GST will affect Indian Smartphone Market?

The report also expressed views of Biren Vyas who is a partner with Grant Thornton India. According to him, a centralised tax will diminish the burden on manufacturers because the other smaller indirect tax won’t impose to them. This will bring down the prices of the products as the manufacturers will pass on the benefits to its end users. For smartphones, GST will be imposed somewhere in between 5 to 12 percent, whereas the luxury smartphones like iPhone would be applicable for 18 percent or higher rate, Vyas added.

You may like to check: Smartphones Below Rs.15000 in India.


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