Despite growing demands from industry bodies, the 18% GST on smartphones is unlikely to be reduced. Here’s what it means for consumers and manufacturers.
No Relief for Smartphone Buyers
The much-anticipated two-day GST Council meeting, chaired by Finance Minister Nirmala Sitharaman in New Delhi, has left smartphone manufacturers disappointed. While discussions around rate rationalisation continue, industry sources suggest that the current 18% GST on smartphones is unlikely to be reduced anytime soon.
Sources revealed that there were initial expectations of a possible revision, but with talks focusing only on a two-slab structure, the 18% slab is expected to stay. “If there was a discussion about reintroducing a 12% slab, we could have expected some relief. But for now, there is no indication of change,” said an industry insider.
Smartphone Prices May Not Drop
The mobile industry had been hoping for a cut to 5% GST, which would have significantly reduced smartphone prices. However, unless such a cut is introduced, experts believe the prices will remain unchanged. This could dampen consumer hopes ahead of the festive season when smartphone demand typically surges.
Industry’s Long-Standing Demand
The India Cellular and Electronics Association (ICEA) has repeatedly urged the government to reduce GST on smartphones and components from 18% to 5%, arguing that smartphones are an essential tool of digital access for more than 90 crore Indians. Before GST implementation, most states classified mobile phones under essential goods with a 5% VAT. The rate was first increased to 12% and later to 18% in 2020.
Smartphone Manufacturing Outlook
Despite no immediate relief on GST, the government’s push for local manufacturing could offer indirect benefits to Indian smartphone makers. According to ICEA, India’s mobile phone manufacturing industry is expected to reach ₹5.45 lakh crore in FY25, with exports crossing ₹2 lakh crore.
