GST on Mobile Phones: Rates & Applicability

Aarika , Last updated: 19 February 2024  
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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 Mobile Phones

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.

Published by

Aarika
(Finance Professional)
Category GST   Report

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