GST Impact on iPhone

Apple cuts prices of all iphone model in India by up to 7.5 percent.

1- iPhone 7 plus(32 gb) of ₹72000, is now at ₹67300.

2- iPhone 7 plus(128 gb) of ₹82000, is now at ₹76200.

3- iPhone 7 plus(256 gb) of ₹92000, is now at ₹85400.

4- iPhone 7(32 gb) of ₹60000, is now at ₹56200.

5- iPhone 7(128 gb) of ₹70000, is now at ₹65200.

6- iPhone 7(256 gb) of ₹80000, is now at ₹74400.

7- iPhone 6s(32 gb) of ₹50000, is now at ₹46900.

8- iPhone 6s(128 gb) of ₹60000, is now at ₹55900.

9- iPhone SE(16 gb) is now at ₹21800.

10- iPhone SE(32 gb) of ₹27200, is now at ₹26000.

11- iPhone SE(128 gb) of ₹37200, is now at ₹35000.

"GST at 12% will cause 4-5% increase in prices in most geographies, therefore 5% GST rate recommended by the IT and electronics ministry is the most appropriate rate," he added.

Gujarat, Madhya Pradesh and Maharashtra, may not see price drops even though they have VAT rates between 12.5% and 15%, as they subsidize to avoid grey marketing, while prices may not rise in Punjab, Rajasthan and Chandigarh that have rates of 8%-9%.

For mobile phones imported and sold in India, duty was from 17% going upto 27%, which now comes down to 12%, giving imports a leg up. And those made in lower VAT states would be priced higher to match up to 12% GST.

E-Commerce companies will be able to freely deliver goods across the country and certain complaints of specific states not falling into the delivery zone would be eliminated. The rise in the cost of the tax to a proposed 18% would increase administration costs for E-Commerce players. The online sales have been slowed down for the last 2-3 months due to the additional taxes levied by certain states. However, it is still a matter of concern for many E-commerce players.

With the growing competition from the Chinese manufacturers like Huawei, Oppo, etc. it is going to be interesting to see how things follow-up in coming months. But talking about GST, let’s just hope it is not going to make much of the difference as already we know smartphone prices are too high in India when it comes to some of the flagship smartphones. Also, note that major manufacturers including Apple have promised to make their smartphones in India. So if that happens successfully then, all this can cut down the cost a lot as well. Several states including Tamil Nadu, Haryana, Andhra Pradesh and Karnataka currently levy VAT on handsets at 4-5%, while the rate goes up to 15% in Gujarat and Assam.

Most mobile phones may get costlier with the government imposing GST of 12% tax rate taking away the benefit of the duty difference that was being offered to local manufacturers. Prices of phones that are imported are likely to go down, while those that were manufactured locally may go up. For mobile phones imported & sold in India, duty was in the range of 17% to 27% tax rate. which may now come down to 12% tax rate. For phones that are manufactured & sold within India, the duty varied from 7.5% to 17% tax rate including the value added tax which varied between 5% to 14.5% tax rate, now that comes down to 12% tax rate as well.

Bhaskar Pramanik, chairman, Microsoft India, opined, "If the current indirect taxes are less than the proposed GST, then it will raise up the prices of goods like smartphones, tablets, laptops etc.. However, in the long run, it will eventually start benefitting the common man with reduction and levying out various taxes on such goods. Additionally, it will smoothen up the movement of goods across the country as well as beyond country borders."

Nevertheless, GST will speed up interstate movement of goods and thus will boost e-commerce activities. Currently, the Bill is pending with the Lok Sabha after whose consent it will have to be ratified by state governments. It is a long way to go now and skeptics say that it may even miss next April target. Thus we will have to wait a bit longer for the finer details to emerge after which its effect on telecom and IT products will be clearer.


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