Table of Contents
GST stands for Goods and Services Tax is a unified tax system that combines various indirect taxes into a single tax structure to simplify and streamline the taxation process on goods and services.
GST on mobile phones is a consumption tax levied on the selling price of the phone. The taxes generated are paid to the government and is intended to streamline taxation and replace multiple indirect taxes.
GST Rate on Phones
The GST rate on mobile phones is 18% and HSN is 8517.
Example : If the cost of a mobile phone is 25,000, the GST amount at 18% would be 4,500 (18% of 25,000). Therefore, the total price, including GST, would be 29,500 (25,000 + 4,500).
However, for accessories GST rates are :
| Category | HSN | Rate |
| Battery | 8506 | 28% |
| Back Cover | 4202 | 28% |
| USB Cable | 8504 | 28% |
| Lithium-ion batteries | 85076000 | 18% |
| Power bank | 8507 | 18% |
| Memory card | 8523 | 18% |
| Speakers, headphones, earphones | 8518 | 18% |
| Plastic screen protector | 3919 | 18% |
| Tempered glass screen protector | 7007 | 18% |
| Wireless Network Phone Components / Wireless Communication Device Components | 85 | 12% |
Applicability
GST applies to all mobile phones, including smartphones and feature phones, without exemption. The tax is comprised of CGST + SGST/UTGST or IGST based on the seller's location.
- If purchased from a local seller, then CGST (e.g., 9%) + SGST/UTGST (e.g., 9%) is applicable.
- If bought from a seller outside your state/union territory, IGST of 18% is applicable.
About ITC on Mobile Phones
Input tax credit (ITC) can be claimed on mobile phones if phones are purchased for business purposes and businesses can offset the GST paid on mobile phone purchases against the GST they collect on sales or services rendered.
Impact of GST on import
Budget 2023
- Import duty on camera lenses and related parts, including the camera module for cellular mobile phones was reduced to nil from the previous 2.5%.
- The duty exemption for importing lithium-ion cells used in making mobile phone batteries was extended until March 31, 2024.
Budget 2020
- Imported mobile phones were exempt from a 10% social welfare surcharge, but this surcharge was reinstated in Budget 2020, making imported handsets costlier.
- Imported mobile phones are subject to basic customs duty and social welfare surcharge, increasing their cost compared to locally made ones.
- IGST is charged on the value of goods after adding basic customs duty and any other applicable duty, further increasing the price of importing mobile phones into India.
CAclubindia
