The GST on mobile phones in India has evolved over time. Notably, the rate increased from 12% to 18% on April 1, 2020, as per the 39th GST Council meeting. Additionally, Budget 2023 proposed raising import duties on phone manufacturing materials, potentially leading to higher prices and revised GST rates.
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GST on Mobile Phones
GST rates on mobile phones are set at 18% for both smartphones and feature phones, effective from April 1, 2020. This uniform rate applies across all states, simplifying the taxation process compared to the previous VAT system.
GST Rate on Mobile Phones and Accessories with HSN Code
Item |
HSN CODE |
GST RATE |
| GST on Mobile Phones | 8517 | 12% |
| GST on Charger | 8504 | 28% |
| GST on Battery | 8506 | 28% |
| GST on Power Bank | 8504 | 28% |
| GST on Leather Phone Case & Back Cover | 4202 | 28% |
| GST on Memory Card | 8523 | 18% |
| GST on USB Cable | 8504 | 28% |
| GST on Earphone, Headphones and Speakers | 8518 | 18% |
| GST on Plastic Screen Protector | 3919 | 18% |
| GST on Tempered Glass Screen Protector | 3923 | 18% |
Related Read: GST HSN Code List
GST on Mobile Phone Repair Services
Mobile phone repair services are subject to a standard GST rate of 18%. This rate applies to the labor charges for repairing the device.
GST on Mobile Phone Repair Parts
- Spare Parts: The GST rate on spare parts used for repairs depends on the specific component. Most spare parts, such as display screens, headphone jack, batteries, and internal components, attract an 18% GST rate.
- Input Tax Credit (ITC): Repair shops can claim input tax credit on the purchase of spare parts used in repairs, which can offset their overall tax liability.
GST Calculation on Mobile Phones
GST is calculated by multiplying the tax rate by the price of the mobile phone.
Formula to Calculate GST on Mobile:
GST amount = (Price of product × GST rate) / 100
For instance, if a mobile phone costs ₹25,000, the GST at 18% would be ₹4,500 (18% of ₹25,000).
Using this formula, you can calculate the GST on any mobile phone by entering its price and the applicable tax rate.
When are SGST, CGST, and IGST Applicable on Mobile?
When purchasing a mobile phone, the application of GST—comprising SGST, CGST, or IGST— are based on the location of the buyer and seller:
Intra-state Purchase
If a customer buys a mobile phone within the same state, the 18% GST rate is divided equally into State GST (SGST) and Central GST (CGST). For example, with a mobile phone priced at ₹20,000:
- SGST (9%): ₹1,800
- CGST (9%): ₹1,800
- Total Price: ₹20,000 + ₹1,800 (SGST) + ₹1,800 (CGST) = ₹23,600
Inter-state Purchase
If a customer buys a mobile phone from a dealer in another state, Integrated GST (IGST) is applicable. The entire 18% GST is charged as IGST. For example, for a ₹20,000 mobile phone purchased from Maharashtra by a customer in Karnataka:
- IGST (18%): ₹3,600
- Total Price: ₹20,000 + ₹3,600 (IGST) = ₹23,600
To stay updated on any changes to the GST rate on mobile phones, you can follow announcements from the GST Council, the Ministry of Finance, and other reliable news sources.
Related Read: What is CGST, SGST, IGST, and UTGST?
Impact of GST on Mobile Phone Prices
The shift from the old tax regime (VAT) to GST has significantly impacted mobile phone prices.
Pre-GST Vs. Post-GST Prices
| Particulars | Pre-GST | Post-GST |
| Cost of manufacturing (a) | 10,000 | 10,000 |
| Excise duty @1% (b) | 100 | – |
| Base value for VAT calculation (c) | 10,100 | 10,000 |
| VAT @14%/GST @ 18% (d) | 1,414 | 1,800 |
| Sale price quoted by manufacturer to retailer (e) = (a) + (b) + (c) + (d) | 11,514 | 11,800 |
| Value addition/packing charges (f) | 600 | 600 |
| Total value (g) = (c) + (f) | 10,700 | 10,600 |
| VAT @ 14%/GST @ 18% on above (f) value | 84 (1,498 – 1,414) | 108 (1,908 – 1,800) |
| Total price | 10,784 | 10,708 |
Impact on Different Price Segments
- Budget Smartphones: The 18% GST rate led to a slight increase in prices for budget models, such as those from brands like Realme, Redmi, and Poco impacting affordability for price-sensitive consumers.
- Mid-Range Smartphones: This segment experienced a relatively neutral impact, with price adjustments varying across brands. Brands like Samsung, OnePlus, and Vivo fall into this category.
- Premium Smartphones: High-end devices were less affected by the GST rate due to their overall pricing. Brands like Apple, Samsung (flagship models such as Galaxy S24 series), Google Pixel and OnePlus premium series are examples.
How Smartphones Dealers Benefit from GST?
The implementation of GST and new GST slab rates has brought several advantages to mobile phone dealers:
- Simplified Tax Structure: The uniform 18% GST rate across India under HSN code 8517 replaced the complex VAT system, reducing compliance burdens and operational complexities.
- Input Tax Credit (ITC): Dealers can claim ITC on inputs like rent, electricity, and transportation, improving cash flow.
- Reduced Paperwork: GST’s digital processes and reduced documentation requirements have streamlined operations.
- Enhanced Consumer Confidence: A uniform pricing structure across states has boosted consumer trust and increased sales.
- Supply Chain Efficiency: GST has improved supply chain management by eliminating inter-state check-posts and reducing transit time.
Can ITC Be Claimed on Mobile Phones?
Yes, Input tax Credit (ITC) can be claimed on mobile phones under certain conditions. Businesses can claim ITC on mobile phones purchased for business use, provided they have a valid tax invoice and the phone is used for business purposes. However, personal use or employee benefits do not qualify for ITC. Proper GST-compliant invoices and documentation are required to claim ITC, ensuring the supplier’s GSTIN, invoice details, and compliance with GST rules.
GST Compliance Challenges for Mobile Phone Retailers in India
Mobile phone retailers face several compliance challenges under the GST regime, impacting invoicing, tax credits, returns, and overall business operations:
- Invoicing Requirements: Retailers must issue GST-compliant invoices that include details such as GSTIN, itemized prices, and applicable taxes. Failure to meet these requirements can lead to penalties.
- Input Tax Credit (ITC) Reconciliation: Proper reconciliation of ITC is crucial to claim credits accurately. Retailers must reconcile purchases with GST invoices received from suppliers to avoid discrepancies.
- GST Return Filing: Retailers must file GST returns on time, detailing sales, purchases, and tax liabilities. Delayed or incorrect filings can result in penalties and interest charges.
- Challenges with Bundled Offers: Invoicing for bundled offers or discounts, common in the mobile phone sector, requires clear segregation of individual components for correct tax calculation.
- Handling Returns, Exchanges, and Warranties: GST implications vary for returns, exchanges, and warranties. Proper documentation and adjustment of tax credits are necessary to comply with GST regulations.
- Impact on Inventory and Accounting: GST affects inventory management and accounting practices due to changes in tax rates, credits, and compliance requirements. Retailers must maintain accurate records and update systems accordingly.
Also Read:
Frequently Asked Questions
1. What is the GST Rate on Imported Mobile Phones?
The GST rate on imported mobile phones and their components is 18%. However, the overall cost of imported phones is influenced by various factors such as custom duty, import duty on components, and IGST.
2. What is the difference between GST and the old tax regime for mobile phones?
Under the old tax regime, mobile phones were subject to VAT and excise duty, which varied across states. GST has replaced these taxes with a uniform rate of 18%.
3. Is 28 GST on mobile phones?
No, the GST rate on mobile phones is 18%.
4. What is the GST on an iPhone?
The GST on an iPhone, like other mobile phones, is set at 18% in India. This rate applies uniformly to both smartphones and feature phones.
5. What is the GST on smartphones?
The GST on smartphones is set at 18% in India.
6. Is there GST on mobile phone accessories?
Yes, mobile phone accessories are subject to 18% GST.
7. How does GST affect the price of imported mobile phones?
GST, along with increased import duties proposed in Budget 2023, can increase the cost of imported mobile phones.
8. Are there any concessions or exemptions for GST on mobiles?
There are no specific exceptions or exemptions for GST on mobile phones; they are uniformly taxed at 18%.
