GST Hikes on Mobile Phones in India

Indian Cellular Association calls 18% GST on Mobile Phones as a harmful step for ‘Digital India’

Technology

The GST Council has decided to increase the Goods and Services Tax (GST) rate on mobile phones to 18 percent. Explain that earlier, up to 12 percent of goods and service tax was charged on mobile phones. At the same time, it has been increased to 6 percent, now it has been increased to 18 percent. Due to this, there is a possibility of increasing mobile prices in the retail market. In such a situation, the Indian Cellular Association has described it as a harmful step for Digital India.

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If the smartphone manufacturers decide to pass it on to consumers, then from April 1, the prices of all smartphones will increase. Till now the GST rate on mobile phones was 12 percent while the battery was taxed at 18 percent.

President of India Cellular Association Pankaj Mohindroo has said that the move of a 6 percent increase in GST will be ‘very harmful to the vision of Digital India’. He said that due to this, sales in the market will be reduced. He says that it can cause a loss of at least 2 lakh crore rupees.

Meanwhile, Manu Kumar Jain, MD of Xiaomi India, says that this step can lead to a huge decline in the industry. Xiaomi is India’s largest smartphone vendor and has most of its units locally. Jain tweeted that the smartphone industry is already grappling with the loss of the Indian rupee against the dollar. Along with this, in a second tweet, he urged India’s Finance Minister and Prime Minister Narendra Modi to reconsider the increase.

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The Indian Cellular Association, representing the top smartphone brands, wrote a letter to Union Finance Minister Nirmala Sitharaman, urging her to maintain the rate at 12 percent. Mahendroo had said in the letter that due to a severe decline in the mobile supply chain due to Coronavirus, a lot of damage has been done. He said that this is the most inappropriate time to consider any increase in the GST rate on mobile phones.

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