Smartphones to get more expensive in India.
Xiaomi, Realme, Samsung and other mobile phone brands are constantly launching new smartphones in India. While they try to be as aggressive as possible on the prices, the Indian government has raised the goods and services tax (GST) on mobile phones forcing the companies to increase the prices of the smartphones or reducing their profit margins. At the 39th GST Council, the GST rate on mobile phones has been raised from 12 percent to 18 percent.
"Mobile phones and specified parts to attract 18% versus 12%. All other items, if there's a need to calibrate the rates, to remove the inversion, we can take them up at future, the examination of that can happen at a later time," said finance minister Nirmala Sitharaman.
According to the experts, the rise in GST will result in an increase in the prices of the finished goods. This may also improve the capital position of mobile phone manufacturers in the country. Up until now, the smartphone manufacturers have been paying 18 percent GST to buy the parts, however, they were not supposed to charge more than 12 percent from the consumers. Now, with the revised rates, the companies can charge 18 percent on the finished goods resulting in levelling the amount of tax being paid by the consumer and the manufacturer. As a result of an end-user, the rates of smartphones will soon be increased in the Indian market.
The revised GST rates will be applicable starting April 1, 2020. So, if you are planning to buy a new smartphone, it is just the right time as the phone manufacturer might increase the rate going forward.
