The Goods and Services Tax (GST) on mobile phones has been increased from 12 per cent to 18 percent. This change in tax slab will have a direct impact on the pricing of mobile phones in India. West Bengal was among the states which had cautioned against increasing the tax rate citing the weak economic situation of the country and the impact of the Coronavirus outbreak.
"The 6 per cent GST increase will be detrimental to the vision of 'digital India'," said Pankaj Mohindroo, ICEA Chairman. "Consumption will be stymied and our domestic consumption target of $80 billion (Rs 6 lakh crore) by 2025 will not be achieved. We will fall short by at least Rs 2 lakh crore," he said.
In a letter to the Finance Minister on March 12, the ICEA had said the mobile handsets sector was in deep stress because of the supply chain disruption due to coronavirus outbreak.
It was the most inappropriate time to consider GST hike on mobile phones, it added.
The industry body had also said the GST hike on mobile phone might adversely affect localisation of manufacturing as well as popularisation of the country's digital payments objectives.
According to ICEA, 31-32 crore Indians who buy phones in the country will be impacted by the move.
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