Cut GST on mobile phones to 5%; rising component prices hit affordability: Industry to FM Nirmala Sitharaman

NEW DELHI: The top handset makers have reiterated their demand that goods and services tax (GST) levied on such devices be cut from 18% presently to 5%, as a sharp increase in memory prices has led to an increase in costs and is pressuring entry-level buyers in the sub-₹10,000 segment.

“A 5% GST rate will stimulate the domestic market by reducing the upfront cost of smartphones and feature phones; encouraging consumers to replace older devices; supporting the migration of feature-phone and 2G users to smartphones; and expanding demand in rural and lower-income markets,” Pankaj Mohindroo, chairman of the India Cellular and Electronics Association (ICEA), wrote in a letter to Union Minister of Finance Nirmala Sitharaman.