14 Sep 2019Posted By: Mudit Handa


GST on Mobile Phones & Mobile Accessories

There is no doubt that the mobile phone has become a basic necessity for every individual. In fact, it has now become 4th essential need of a common man besides food, raiment & shelter. Today, its almost impossible to imagine daily life without a phone. Like other commodities, the cost consideration in the case of the mobile phone depends on how GST rules apply to it. Hence, we must know what are the rules of GST on Mobile Phones & Accessories. 

The introduction of GST or Goods and Services Tax is estimated as an essential move in the advancement of indirect taxation in India. Merging numerous individual taxes into a uniform tax has benefitted many traders having GST registration. This has diminished double taxation, cascading effect of the tax, the multiplicity of charges, class issues, chargeable occurrence, etc. and begin to a typical interstate market. 

 

1. What is the importance of Goods and Service Tax?

Based on most assets and services which is traded for indigenous consumption, GST is the most prominent value-added indirect tax reform in the country. Consumers pay the GST, but it is paid to the government by the company’s marketing the goods and services. 

With the implementation of the new government, India has grown one centralized business with only one obscure tax. This is indeed helped the merchants having GST registration. 


2. How does GST benefit the dealers of smartphones?

GST will occur in several considerations and easier installment of taxes. Electronic devices such as smartphones and accessories also come under the GST ambit. 

  • In today’s generation, where the primary concern of youngsters is a smartphone, sales are increasing day by day for the electronic goods manufacturers & dealers having GST registration
  • Before GST, under the VAT regime, the price of a smartphone wasn't fixed as it diversified from state to state. 
  • GST provides you the same taxation rate over the states in India with a market value of 12% and the related HSN code is 8517

3. What is the rate of GST on mobile phones & accessories?

There is a fixed GST rate of 12% on a mobile phone if you're buying a new smartphone. 

However, most of the smartphones and accessories come under the 85th Chapter of HSN. The GST rate on phone accessories is 18%. However, the GST rate changes according to the nature of the product. So, it's important to be aware of the HSN codes and GST rates under Chapter 85. Here are the relevant GST rates on mobile accessories:

S.No

Particulars

HSN codes

GST rate (%)

1

 All Featured Smartphones

8517

12

2

 Chargers, Power Bank & USB cables

8504

28

3

 Earphones, Speakers, and Headphones

8518

18

4

 Leather Phone Case, Back Cover & Li-ion Battery

4202, 8506

28

5

 Plastic and Tempered Glass Screen Protector

3919, 3923

18

The dealers of mobile phone accessories having GST registration need to consider these specifications while invoicing. 


4. What is the impact of GST on mobile phones & accessories?

GST intends to modernize the oblique tax rate of the world’s 7th most liberal marketplace regarding GDP. A vital success of GST will be that if it will improve in decreasing the cascading impact of taxation.

  • Offers with taxed interchange: After the implementation of GST on smartphones with a taxation rate of 12%, many phone brands coming with some new exchange offers which allows users to buy a new one against the old handsets. Now, the GST will apply for the customers with a definition of rations under the GST law.

  • End of Online benefits: Before the GST, under the VAT regime, there were a lot of attractive offers that varied with different prices in the retail stores. Anyone could purchase where the VAT rate was low as compared to other states. VAT rates were different over states from a low of 5% in Karnataka and Tamil Nadu to a high of 14% in states like Delhi. But this indent is closed for the consumers as GST is applied uniformly in the whole country.

  • New Indirect tax system: In India, there were 36 VAT authorities (29 States and 7 Union Territories) and away from that 29 jurisdictions have VAT rate on smartphones of 5% alongside a 1% excise tariff. In some advanced cities like Punjab, Rajasthan, and Chandigarh, it had a VAT rate of 8.9%. Now GST @ 12% applies to the current 28 States and 9 Union Territories, as opposed to the earlier rate of 13.5% on smartphones and accessories. GST rate is uniform for all traders having GST registration.

  • Effect on the price of smartphones: GST resulted in the production of phones and phone accessories more expensive as they perform under cheaper tax rates due to privileges given supporting the government's 'Make in India' policy. On the other side, this has also resulted in more job opportunities. 


5. What are the custom duties on imported smartphones?

Nowadays, the bulk of smartphone users’ troops operate from sheds in every state via stock transfer and thereafter exchange assets nearby to the distributors. But, if you're importing smartphones from outside the country, then these duties will utilize as per the law of GST.

  • Countervailing Duty (CVD): 12.5%

  • Special Additional Duty (SAD): 0%

  • Basic Customs Duty (BCD): 0%

  • National Calamity Contingent Duty (NCCD): 1%

So, these are important facts about GST on mobile phones & accessories.

In case you require any kind of guidance with respect to the GST registration in India, please feel free to contact our business advisors at 8881-069-069.

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