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Will mobile phones become cheaper after GST reforms?
The current 18% GST is regressive, for the mobile phone is the primary tool of digital access for over 90 crore Indians, says an industry body.
An industry body has called for mobile phones to become cheaper after the upcoming GST reforms because they are essentially essential goods.
India Cellular & Electronics Association wants mobile phones and related components to be placed in the 5% GST slab as “the current 18% GST is regressive”, according to a media statement on Tuesday. The mobile phone is the primary tool of digital access for over 90 crore Indians, the ICEA said. It must be treated as a necessity in the upcoming GST reforms.
“The mobile phone is no longer aspirational. It is essential digital goods. It should rightly be taxed at 5% GST, in line with PM Modi’s GST reforms agenda and his vision of a $500 billion electronics ecosystem,” ICEA Chairman Pankaj Mohindroo said in the statement.
“India cannot build an inclusive Digital India if the very device (mobile phone) that enables it remains unaffordable for millions. A 5% GST will restore affordability, stimulate demand, and accelerate India’s journey towards universal digital access.”
India’s mobile phone manufacturing industry has grown from ₹18,900 crore in FY15 to ₹5,45,000 crore in FY25, according to ICEA. At the same time, mobile phone exports have crossed the ₹2 lakh crore mark—making India the second largest phone maker globally.
The domestic market, however, has weakened over the same time period.
Since the GST hike to 18% in 2020, annual sales have declined to 220 million units from 300 million units then. That indicates slower replacement cycles.
To be sure, mobile phones were placed in the 12% GST slab when the indirect tax was first introduced in 2017. That was hiked to 18% in 2020. In the pre-GST era, most states capped value-added tax on mobile phones at 5%, recognising them as essential goods, ICEA said.
