GST on Mobile Phones I Applicability I GST Rate and Impact Explained

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What is GST in India?
GST is known as the Goods and Services Tax. It is an indirect tax which has replaced many indirect taxes in India such as the excise duty, VAT, services tax, etc. The Goods and Service Tax Act was passed in the Parliament on 29th March 2017 and came into effect on 1st July 2017.

In other words,Goods and Service Tax (GST) is levied on the supply of goods and services. Goods and Services Tax Law in India is a comprehensive, multi-stage, destination-based tax that is levied on every value addition. GST is a single domestic indirect tax law for the entire country.

Applicability of GST on mobile phones
GST has served as a major transformation tool for the Indian economy by bringing all the goods and services under a single taxation system. GST is applicable on all mobile phones whether it is a smartphone or a feature phone, without exemption.

What is the GST rate on mobile phones?
Under the pre-GST regime, a smartphone’s price wasn’t fixed as taxes varied from state to state. But under GST, a uniform rate of 18% is charged across the county. The related HSN code is 8517. GST rate on mobile phones and accessories is covered under HSN chapter 85.

How did the price of mobile phones change due to GST?
Before GST, excise and VAT were charged on mobile phones. The VAT rates varied from state to state, so it was difficult to set a uniform price for the mobile phone. Under GST, the tax rate is the same across the country, and thus a uniform price can be set for a mobile phone. At present, the GST rate on mobile phones is 18%.

The rate of GST on mobile phones and accessories were increased to 18% from 12% with effect from 1st April 2020 at the 39th GST Council meeting. This has increased the prices of mobile phones.

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