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% |
