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Impact Of GST On Daily Technology In India

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Impact Of GST On Daily Technology In India

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The multi-rate Goods and Services Tax (GST) tax which was meant to unify the nation, went into effect on 1 July 2017.  The nationwide sales tax is said to have affected various sectors. Before you switch to Google for answers, here’s a brief about the new tax system.

It is a value-added tax levied on most goods and services sold for domestic consumption, ridding the consumer of different levels of taxes which were paid earlier. All different levels of taxes will be replaced by a single tax – GST.

Over 1200 goods and 500 services were categorised by the GST Council under four different tax slabs – 5%, 12%, 18% and 28%. For those of you wondering which slab the tech world falls under, here’s how the GST will impact your tech life.

Smartphones, Tablets and Accessories

Smartphones are now be cheaper, thanks to the Goods and Services Tax. The smartphones were earlier taxed at 13.5 % or higher, after the new tax categorisation, they fall under the 12% tax slab. The new tax system reduced the smartphone prices by 1.5%. GST is also levied on products made under the “Make In India” initiative, hence, the smartphones manufactured in India are bound to get more expensive. Manufacturers currently pay around 7.5-8% duty, but with GST, phone parts will fall under the 12% slab, increasing the manufacturing cost.

Taxed at 12%
Smartphones
Accessories like Smartwatches, Headphones, Chargers, Batteries, etc.
Tablets
Phablets
Featured Phones
Mobile Parts like Processors, RAMs, Motherboards, Displays

Gaming Consoles and Gadgets

The gaming gadgets and games which were previously at 28.5% duty will now be placed under the highest slab which is 28%. Thus the prices won’t waver much on the gaming front except from the slight 0.5% decrease in the tax rate. Utility gadgets, storage devices like hard drives etc. will attract a levy of 18%.

Taxed at 28%  Taxed at 18%
Gaming consoles like Xbox, Playstation, Nintendo Utility Gadgets
Controllers, Games Storage Devices like Hard-drives, Memory Cards
Fitness Trackers
Gaming Accessories like VR headsets

TV, Laptops, Desktops, Cameras

Digital cameras, video cameras, televisions, recorders, speakers, etc will fall under the 28% tax bracket. Monitors and projectors will also attract a GST rate of 28% which was earlier up to 18.5%. Whereas Laptops, desktops will attract a tax rate of 18% which was earlier 14-15%.  IT accessories such as LAN and data cable will be 28% which was earlier 17.5%. Since the implementation of GST, PCs and laptops along with Televisions all fall under the 28% tax bracket.

Taxed at 28%  Taxed at 18%
DSLRs, Digital Cameras, Video Cameras, Recorders Laptops, Netbooks and Notebooks
Televisions Desktops
Computer Peripherals
IT Accessories

Consumer Durables, Electronics

The prices of consumer durables like AC, washing machine, refrigerators, vacuum cleaner, shavers have also gone up by 4% by categorising them in the 28% bracket. Other electronic items like water heaters, hair dryers, curlers  printers, photocopiers, fax machines, ink cartridges, etc. are to levy 28% GST instead of 18% duty. This category consists of

Taxed at 28%
Personal Care Products like Trimmers, Curlers, Hair Dryers
Household Electronics like AC, Washing Machine, Refrigerators
Electrical Appliances like Printers, Photocopiers, Fax Machines

Automobiles

Cars

With the implementation of Goods and Services Tax, luxury car buyers will benefit the most. Before the tax implementation, luxury cars were taxed between 52-55 %, after GST and cess, taxes have reduced to 43%, making them relatively cheaper. Hatchbacks and sedans which attracted a tax of 29%, will now charge 28% GST + 1%  cess, keeping the price unchanged.

Motorcycles

All 350cc and under motorbikes are set to attract a tax of 28%, whereas bikes above 350cc will levy a 31% tax.

Taxed at 43% Taxed at 29% Taxed at 28% Taxed at 31%
Luxury Cars Non-Luxury Cars like Hatchbacks and Sedans MotorBikes at and under 350cc MotorBikes above 350cc
Car Accessories like Stereos, Speakers, Alloy Wheels
Car Parts like Tyres, Radiators, Thermostats

 

Though GST has said to bring major changes in other sectors, the tech industry does not seem be affected by the new tax implementation. The Goods and Service Tax seems to benefit the customers of smartphones, and high end cars, other things remain either unchanged or heavily taxed. Though the gaming industry remains more or less unaffected, devices like laptops, desktops, television etc have seen a high rise in prices.

Category Before GST After GST
Smartphones 13.5% 12%
TV, Cameras, Computer Peripherals and IT Accessories 26.5% 28%
Laptops, Desktops 14-15% 18%
Consumer Durables and Electronics 24% 28%
Luxury Cars 52-55% 43%
Non Luxury Cars 29% 29%
Bikes (above 350cc) 30% 31%
Bikes (below 350cc) 30% 28%
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About The Author
Anshika Jain
  • Thanks for the detailed information about pre and post GST pricing! ?