GST Impact on smartphone prices and phone bills from July 2017
In a few hours, Goods and Services Tax or GST will replace the existing tax model. GST will be implemented nationally, meaning, all the states will pay the same tax on the same items. Some prices will decrease, some will increase. If you were planning to buy a smartphone recently, then chances are that the price of phones will increase due to GST impact on smartphones. The GST Council has placed smartphones under the tax slab of 18%. Previously, consumers had to pay a 15% tax. However, things are more complicated than it seems and consumers may or may not be affected by the new tax system based on what phones they are planning to buy.
GST Impact on Mobile Phones: Prices will not be impacted
Most companies, such as Samsung, HTC, Lenovo, Motorola, Mi and Nokia phones will not experience a hike in prices. These are the leading smartphone brands and a sudden hike in price will negatively impact their sales. Therefore, these brands are planning to absorb the price. For example, if you take the upcoming Nokia 6 into account – it is priced at Rs. 14,999 on the website, inclusive of all taxes. This is a pre-GST price. With the GST, the price tag will be around Rs. 15,390. This is almost Rs. 400 extra for a budget phone.
For flagship phones, such as the OnePlus 5, this price hike is almost Rs 1000. However, the manufacturers are planning to absorb this price and offer you the phone at the intended price. What you won’t see is smartphone discounts anytime soon after GST has been implemented.
Phone Bills After GST – Prepaid and Postpaid
If your postpaid bill was Rs 500, then before GST, with taxes, you needed to pay Rs. 575. After GST, the price will go up to Rs. 590. This also includes cable internet bills. For prepaid users, Rs. 100 got them a talk time of Rs. 85. Now, it will be brought down to Rs. 82. However, in the case of phone bills, the effect would be less felt because of the entry of Reliance Jio as most cell phone operators are reducing pack prices. So, you may get the same talk time as before.