At the 39th GST Council meeting, the rate of GST for mobile phones and accessories was increased from 12% to 18%. Mobile phone prices have increased as a result.GST on mobile phones, GST on mobile accessories, and claiming GST on mobile phones as an input tax credit is explained here.
Under the Goods and Services Tax, most commodities sold in India will be subject to one major tax bracket. This would result in lesser calculations and more ease in payment of the tax. Most of the revisions have been readily accepted by members of the public, while some have been heavily criticized. As each revision updates and improves the previous template, the current GST trends remain as the finance department coordinates with the banking institutions to set a reasonable slab. Here is the GST rate for mobile phones and their accessories.
Present Scenario
The present-day world has declared smartphones as their primary concern, and with annual sales skyrocketing yearly, the trend is here to stay. Several small and medium-level enterprises sell mobile phones and mobile accessories, and the industry is booming and expecting even more growth in the years to come.
Mobile phones and mobile accessories in India are under Goods and Services Tax. The GST rate on mobiles is currently 12%, irrespective of whether the device is a smartphone or a feature phone. The GST rate on mobile electronic accessories is 18%.
Why GST
Before the GST, VAT was the primary form of tax levied on the mobile phone, and as the VAT rates vary from state to state, it was difficult to fix a standard price for the phone. Under GST, the tax rate is the same across the length and breadth of India. Hence, some much-needed uniformity has seeped into the Indian market. Hence, mobile phones’ current GST rate stands at 12%, and they follow the HSN code 8517. As mobile phones sell out like hotcakes, the government makes a lot of money through the GST charged. Economists believe that phones will become even cheaper as the GST levels drop.
Goods and Services Tax (GST) is the value-added tax levied on all goods and services we use within the country. We offer a GST rate finder service that lists out the GST rates of all goods and services available in India. This service is also known as the HSN finder.
Inter and Intra State
As consumers, we are eligible to pay 12% GST while purchasing a new phone. When the purchase is made from a dealer who resides and operates within the same state, the GST is split into SGST and CGST equally. Meanwhile, if bought from a foreign or migratory dealer, an IGST at 12% would be applicable, which is also the case in case you import phones from abroad.
HSN Codes
Most phones and mobile accessories come under HSN Chapter 85; several slabs are available for taxes. You must know the right HSN code to file your invoice appropriately. Here’s a look at a few HSN codes for commonly bought and used commodities.
| ITEM | HSN CODE | GST RATE |
| Phones | 8517 | 12% |
| Charger | 8504 | 28% |
| Earphone | 8518 | 18% |
| Battery | 8506 | 28% |
| Power Bank | 8504 | 28% |
| Leather Phone Case & Back Cover | 4202 | 28% |
| Memory Card | 8523 | 18% |
| USB Cable | 8504 | 28% |
| Headphones | 8518 | 18% |
| Plastic Screen Protector | 3919 | 18% |
| Tempered Glass Screen Protector | 3923 | 18% |
| Speakers | 8518 | 18% |
The GST rate is 12%, irrespective of whether it is a smartphone or a feature phone. The GST rate on mobile accessories is 18% and varies slightly according to the specific product. Since mobile phones use wireless networks, they are part of Chapter 85 of the GST schedule. Here’s a look at the GST slab for the products.
- Phone – 12%
- Parts of the phone – 12%
- Landlines – 18%
- Battery / Power Bank (Lithium-ion) – 18%
- Charger – 18%
- Earphone – 18%
- Memory Card – 18%
- USB Cable – 18%
Battery Issue
Indian phone manufacturers had asked the government to change the GST for the lithium-ion batteries and charge a 12% tax on them as they are used to manufacture the phone. Parts used for the telephone have levied a fee of 12% while these batteries were getting charged 28%, and it is this discrepancy led to the plea. However, they also reported that having the SGST, IGST and UGST affects the supply chain. It adds interpretational challenges and makes the viability of low-scale production more difficult.
‘The 12% GST on parts for mobile manufacture covers batteries, which are to be inserted into the mobile. There is no revenue implication on this measure, but it will greatly ease the pain which our manufacturers are subject to,’ argues the Indian Cellular Association while talking to revenue secretary Hasmukh Adhia.
After the plea gained momentum, the government slashed GST rates for around 50 items, including washing machines and mobile accessories. Electric companies have assured clients that they will ensure that the benefits will reach them through lower prices.
For example, Rajeev Bhutani, Senior Vice President of Samsung India, clarified, ‘Samsung is a consumer-centric company. We are happy to extend full benefits, that is, 7.81+ percent of GST rate reduction, to all our consumers. It will fuel the demand for consumer electronics products now and in the ensuing festival season. The decision also helped India’s mobile phone industry by lowering the tax on lithium-ion batteries.
What Is the Validity of the GST Certificate?
The GST certificate, once issued, is valid until it is cancelled, surrendered, or suspended. But the GST certificate granted to taxable individuals has a validity date. Understand the procedure for GST registration and GST returns here.
What are Specified Enterprises as per the Notification?
As per the provisions of the MSME Development Act, 2006, the Specified companies are those that have received goods and services from MSMEs and whose payments have not been made until 45 days. More on Income Tax Return Filing.
What Are the Different Modes of Filing the Return of Income?
You can file the income return either in paper form or even electronically. You may require a digital signature to validate the return forms when filing the returns electronically. Learn more about ISO Certification.
Can Anyone Join ISO?
Businesses or individuals can’t participate in ISO. However, ISO membership is permitted for national standards companies and similar organizations representing standardization. More info on NGO Registration in India.
What are the Different Acts in which an NGO is Registered?
The Societies, Trusts, and profitable NGOs are registered under the Indian Trust Act 1882, the Societies Act 1860, and the Companies Act 1956. More about MSME Registration Online.
Conclusion
GST (Goods and Services Tax) aims to bring all commodities in the country under one tax bracket. By implementing this new tax initiative, tax calculations will be simplified, and payments will be easier. In this article, we tried to collect detailed information on how GST applies to electronics, including smartphones and accessories.
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