Understanding GST on Mobile Phones: Everything You Need to Know
With the introduction of Goods and Services Tax (GST) in India, the taxation system underwent a transformation. It was a comprehensive tax reform designed to bring in a uniform tax structure across different sectors. The mobile phone industry, too, was impacted by this reform, and understanding GST on mobile phones is crucial for anyone wishing to buy or sell mobile phones in India.
GST on mobile phones was introduced on 1st July 2017, and since then, it has replaced the earlier indirect taxes like Excise Duty, Value Added Tax (VAT), and Central Sales Tax (CST). In addition to this, customs duty continues to apply to imported mobile phones.
To make it easier for the customers, the government has fixed a 12% GST rate for mobile phones. This rate is applicable to all types of mobile phones, whether it’s a basic phone or a high-end smartphone. So, when you buy a mobile phone, you will have to pay 12% GST on its price.
However, it’s not just the buyer who is liable to pay GST on mobile phones; even the seller has to do so. As per the GST regulations, any business that has a turnover of over Rs. 20 lakhs must register with GST and collect GST from its customers. Hence, if you run a mobile phone shop, you need to register under GST and charge 12% GST on the mobile phones you sell.
Another important concept to be aware of when understanding GST on mobile phones is Input Tax Credit (ITC). It is the tax credit that a registered business can avail of on the GST paid while purchasing goods/services. By claiming ITC, a seller can reduce the tax liability to the extent of the ITC claimed. Hence, it’s imperative to keep a record of GST paid on the inputs used in the business and claim ITC accurately.
In conclusion, understanding GST on mobile phones is essential for anyone who wants to run a successful mobile phone business or purchase a new mobile phone in India. With the 12% GST rate being fixed on mobile phones, it has provided a uniform tax structure across all mobile phone types. Furthermore, as per the GST regulations, even the sellers who have a turnover of over Rs. 20 lakhs must register under GST and collect GST from customers. Overall, staying updated with GST regulations will ensure a smooth and hassle-free transaction for both buyers and sellers in the mobile phone industry.
