Published On: Sat, Mar 14th, 2020

GST hike to make mobile phones costly, hit sales

New Delhi: With the GST Council, headed by Finance Minister Nirmala Sitharaman, increasing the GST on mobile phones from 12 per cent to 18 per cent on Saturday, industry experts feel it would hit the industry and the consumers hard.

India Cellular and Electronics Association (ICEA) stressed that the move would stymie consumption

Brands are in no position to absorb this impact. “They will, most certainly, decide to pass it on to the consumer, at least in case of high-selling models,” said Navkendar Singh, Research Director, IDC India.

The India Cellular and Electronics Association (ICEA) stressed that the move would stymie consumption.

“The 6 per cent GST increase will be detrimental to the vision of ‘digital India’. Consumption will be stymied and our domestic consumption target of $80 billion (Rs 6 lakh crore) by 2025 will not be achieved. We will fall short by at least Rs 2 lakh crore,” said Pankaj Mohindroo, ICEA Chairman.

In a letter to the Finance Minister on March 12, the ICEA had said the mobile handsets sector was in deep stress because of the supply chain disruption due to coronavirus outbreak. It was the most inappropriate time to consider GST hike on mobile phones, the industry body said.

It also said the GST hike on mobile phone might adversely affect localisation of manufacturing as well as popularisation of the country’s digital payments objectives.

According to ICEA, 31-32 crore Indians who buy phones in the country will be impacted by the move.

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