Smartphone Industry Seeks GST Cut to 5% for Boosting Demand and Affordability

Last updated: 21 August 2025

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India's smartphone manufacturers are urging the government to reduce the Goods and Services Tax (GST) on mobile phones from 18% to 5%. They argue that smartphones are now essential for daily life, not luxury items, and a tax cut would make them more affordable for consumers, especially in the lower price segments. This move is also expected to stimulate domestic manufacturing and exports, further strengthening India's position as a global handset producer. While some analysts believe a tax reduction could boost market growth, others suggest that revenue is already growing due to a shift towards premium devices.

India's smartphone manufacturers are lobbying the government to slash the GST on mobile phones from the current 18% to 5%, arguing that handsets have become essential digital infrastructure rather than aspirational products. The India Cellular Electronics Association (ICEA), representing global br

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FAQ :

The current GST rate on mobile phones in India is 18%.

Smartphone manufacturers are requesting a reduction in GST to 5%.

The industry believes a GST cut would make smartphones more affordable, boost demand, lower manufacturing costs, and enhance India's competitiveness in manufacturing.

Yes, the India Cellular & Electronics Association (ICEA) argues that mobile phones have become essential for education, healthcare, governance, and financial inclusion.

The smartphone market has stagnated at around 150 million units annually for the past four years, though revenue growth is strong due to premiumisation.

A lower GST is expected to sustain domestic manufacturing and anchor the value chain, potentially leading to increased domestic demand and exports.

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CCI News Desk

Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.

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Smartphone Industry Seeks GST Cut to 5% for Boosting Demand and Affordability