According to Indian finance minister Nirmala Sitharaman, head of Tax (GST) Councel, told on saturday that the impact of GST on mobile phones will be increased from current rant. This may be 18% from 12%. This is expected to apply from 1st April 2020. It is expected that this increased rate may impact Indian smartphone industry. “They will, most certainly, decide to pass it on to the consumer, at least in case of high-selling models,” said Navkendar Singh, Research Director, IDC India.
The Managing Director (MD) of Xiaomi India, said that the decision to increase in rate will make the industry crumble. He also said that the industry, which is already fighting with profitability due to the weakening of Rupee against Dollar making the imports expensive, will suffer even more due to the rise.
The government’s decision to transfer the rate of GST on mobile phones to the highest slab was said to be taken to check the inverted duty structure in the mobile industry. The interest charged on components of smartphones (currently 18%) and the price of smartphones (Currently 12%) is unified for ease.
N.K. Goyal, president of Telecom Equipment Manufacturers Association of India, said that the proper method to unify the rates was to reduce the rate of GST on components to 12%. The India Cellular and Electronics Association (ICEA) had already suggested in the letter dated 12 March to Finance Minister Nirmala Sitharaman that any increase in tax will “adversely affect” the Make In India campaign and the digital payments of the country.
