If the declining overall mobile phone sales and the disruption caused by Coronavirus was not enough, mobile phones are likely to become costlier with the latest bill passed effectively from April 1. According to the reports, the Good and Services Tax (GST) on cellular handsets will be bumped to 18% from its current 12% which is likely to be handed over to the customers i.e. expensive phones.
The proposal was passed by the GST Council to increase the tax rate on certain components and mobiles due to the inverted duty structure. Many smartphone makers have already hinted towards increasing the price tag due to the increased GST. This will apparently affect the overall demand of mobile phones in India which is already taking a hit due to the non-availability of components due to the coronavirus outbreak.
Also Read: Coronavirus Impact On The Smartphone Industry
According to Manu Jain, MD at Xiaomi India, this will adversely affect India’s internet penetration as the majority of traffic comes from mobile phone users. Tarun Pathak, Associate Director at Counterpoint Research added that this isn’t probably the right time to hike the GST on phones given the uncertainty around supply change due to the global lockdown.
As of now, Realme’s upcoming Narzo 10 and Nazro 10A will not be affected by the price hike since the company has decided to absorb the cost while other manufacturers will be handing it over to the customers.
