Government Increases GST Rates in Smartphones and Specific Mobile Parts

Increase in GST rates to 18% in smartphone and specific mobile parts will slower the development of the government’s Digital India Initiative

Highlights
  • Increased GST will put added financial stress in the Industry
  • Covid-19 is resulting in irregular supply chains
  • The Industry is planning to achieve a domestic market of Rs 6 lakh crore by 2025

The GST Council has announced new amendments in the Goods and Service Tax (GST) slab which would increase the GST rates in smartphones and specified mobile parts to 18% which was earlier set at 12%. However, this new tax rate might harm the telecom industry as the market is already facing financial distress because of the irregular supply chains caused by the deadly virus Covid-19. Mobile makers such as Xiaomi, ICEA, CAIT and many more have appealed the government to implement the GST in the old slabs to sustain the demand of smartphones and mobile parts. In support, the GST council marked that Increase in tax rates will regulate the inverted duty structure.

GST Rates Will Increase the Prices of Smartphones

Manu Kumar Jain who is the global vice president and MD of Xiaomi India marked that Increased GST rates will disrupt the entire Industry as the rupee is currently depreciating and increase in GST rates will result in an increased price of smartphones which would shift the whole burden on end consumers. Also, as a result of Increased GST, the Industry will fail to achieve its target of $80 billion or Rs 6 Lakh crores domestic cap by the end of 2025.

As per the sources of ET Telecom, Manu also noted that Increased GST rates would slow down the pace of the government’s Digital India Initiative. Several other mobile makers such as ICEA and CAIT also showed their concerns regarding the new GST slab. Nipun Marya, who is the brand strategist of Vivo India, also marked that Vivo is still evaluating the new tax structure and will evaluate the effects of new tax rates in a few weeks.

Asus ROG Phone II Stock Delayed Due to Coronavirus Outbreak

The growing cases of Covid-19 have been increasing trouble for various industries around the world. Telecom Industry which is worst affected is facing disruption in supply chains because of the deadly virus. In the news, Asus ROG Phone II, which is the cheapest phone in India with a 120Hz screen is facing supply shortage as the Covid-19 has been spread all across Asia. However, the company has noted that the supply shortage is temporary and customers will soon get their hands of the Asus ROG Phone II.

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Chakri is a go-to guy for your next smartphone recommendation. Back in his engineering days, he used to play with smartphones by installing custom ROMs and that passion got him into the tech industry. He still goes nuts about a smartphone knocking his door for review. Currently managing everything at Telecom Talk, Chakri is trying to master PUBG Mobile in his free time.

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