smart fone
It has been suggested to reduce GST to five percent on smartphones priced below Rs 25,000 in the country and to maintain the existing rate of 18 percent on higher priced devices. This suggestion has been made on Wednesday in a report jointly prepared by Grant Thornton (GT) India and Policy Watch India Foundation (PWIF). The report said there is a need to review the tax structure on affordable smartphones, as the current 18 percent GST rate no longer accurately reflects the changing role of smartphones in India’s digital economy.
According to the study, such a tax structure will make smartphones more affordable for first-time buyers and price-sensitive consumers. It will also support the government’s goals of Digital India, financial inclusion and electronics manufacturing. It emphasized that applying the same GST rate on entry-level smartphones and premium devices has a greater impact on the segment that promotes digital inclusion.
What does the study say?
According to the GT Bharat-PWIF study, the sub-Rs 25,000 smartphone segment – which accounts for almost two-thirds of handset shipments in India – primarily caters to first-time buyers, rural families, women, students and low-income customers. The study also says that about 35 crore Indians are still using feature phones, which shows that cost remains a major barrier for more people to connect with the digital world.
Emphasizing that smartphones should now be seen as first-access digital infrastructure rather than just a favorite consumer product. The paper says India imposes one of the highest indirect tax rates on smartphones compared to other electronics manufacturing economies.
Tax is less in these countries
Countries like Vietnam, Thailand, Indonesia and Malaysia have adopted relatively low tax structures, which helps in increasing smartphone adoption by more people while maintaining competitiveness in manufacturing. It further says that the separate GST framework for affordable smartphones should not be seen as a tax exemption for the electronics industry, but as a strategic policy step. The move aligns the tax regime with India’s digital transformation, manufacturing goals and long-term economic objectives.
