The much awaited and debated GST Bill, also known as the Good and Service Tax Bill has finally passed in the Rajya Sabha recently. The bill is ready to shape up the new economic future for India. Both the Central and State Government will work jointly to decide how much tax to be imposed on goods and services. The proposed ideal 18% of tax rate will imposed on goods and services.
That mean the GST rates may significantly change our tech lives in future. And if the tech bacteria have infected you severely, then you might have concerns like-
How does the bill affect the prices of smartphones? Will buying gadgets online from e-commerce portals like Amazon, Flipkart, Snapdeal get more expensive? Will the GST Bill welcome more International electronics device manufacturers to come in India… and what not?
Well there are lots of questions in the tech community towards the unified tax regime. We are trying to answer some of these applicable questions that will impact our gadgets buying decision in the near future.
Impact of GST on Smartphones, Tablets and Laptops
The GST Bill is expected to get reliefs from complicated indirect tax regimes. So one might feel that the additional taxes imposed by state such as entry, octroi, etc. will vanish and it will bring down the smartphone prices. There is both good and bad news for smartphone lovers here. You might expect big benefits from the new taxation policy on smartphones manufactured in India. But unfortunately it may not happen with our beloved imported smartphones, tablets and laptops. Check out our list of Budget Phones for 2016
Presently, the imported smartphones comes with Duty and VAT of around 12.5% to 12.8%. And if the GST rate will applicable on such devices with 18% of tax, then it will obviously increase the cost of the device. Also keep in mind that the 2016-2017 Budget has already raise the prices of mobile devices. So if in today’s scenario, a GST of 18% imposed on a Rs. 10,000 smartphone, then it will naturally cost Rs. 11,800, a Rs. 20,000 phone will cost Rs. 23,600 and so on. So companies like Apple will have to manufacture their products in India to bring down the prices which is putting tax burden on buyers.
Impact on Telecom Sector
The current tax rate on telecom services is at 15%. So it is cleared that the new tax regimes will affect the telephone bills of Indian consumers. While so, the Cellular Operator Association of India has urged the Government that the tax rates applicable on telecom services should not be forced more than the existing tax rates if we are looking for a digitally connected India.
Impact on E-commerce
Previously, the amounts of VAT applied on a product were varied by different states on e-commerce goods. So the GST will definitely reduce the complications of taxes across different states for e-commerce players. But the low cost benefits from e-commerce companies might expect to disappear soon. As retail offline store pays tax on every product purchased from them, e-commerce companies will also come under the GST and as a result of it, the sales, special offers and discounts will be discontinued. But the faster shipping with lower prices can reduce some of the cost burden on buyers.
The GST Bill will take effect from April 1, 2017.
So until then, there are still possibilities to get revisions on these tax regimes. Do let us know your opinions on the GST Bill.