The GST on Mobile Phones in India has remained a hot topic since the tax regime’s introduction in 2017. With smartphones becoming an essential part of our lives, every change in GST directly affects buyers, sellers, and manufacturers.
In September 2025, the government announced a massive GST reform aimed at simplifying tax structures and boosting consumption. While several goods became cheaper, GST on Mobile Phones remains unchanged at 18% — a decision that has sparked debate among industry experts, manufacturers, and consumers.
In this article, we’ll explore the current GST rate, recent reforms, industry demands, and the benefits of lowering GST on smartphones.
1. Current GST Framework for Mobile Phones
Under the Goods and Services Tax (GST) regime, mobile phones — including smartphones and feature phones — are taxed at an 18% GST rate under HSN Code 8517.
Effective Since: April 1, 2020
Accessories: Batteries, earphones, memory cards → 18% GST
Manufacturing Parts: Some components used in production are taxed at 12%
This uniform taxation replaced the earlier state-wise VAT structures, making pricing more transparent and standardized across India.
2. GST Reforms 2025 & Impact on Mobile Phones
In September 2025, India announced a historic GST restructuring to simplify taxation:
Key Highlights of GST Reform 2025
New Slabs Introduced → 5% & 18%, plus 40% for luxury/sin goods
Several Items Became Cheaper → TVs, ACs, and insurance saw significant GST cuts
Mobile Phones Unchanged → Despite industry requests, GST on Mobile Phones stays at 18%
This has led to mixed reactions. While many sectors benefit from reduced taxes, mobile manufacturers and consumers continue to bear the same burden.
3. Industry Voices: The Demand for 5% GST on Mobile Phones
The India Cellular & Electronics Association (ICEA) has been at the forefront of pushing the government to reduce GST on Mobile Phones to 5%, citing several reasons:
Smartphones are Essential → Used in education, banking, e-commerce, and governance
Affordability Challenges → High taxes reduce access for lower-income groups
Market Growth Potential → Lower GST would encourage faster digital adoption
✓ Industry Growth Stats (FY15 vs FY25)
FY15 Market Size: ₹18,900 crore
FY25 Market Size: ₹5,45,000 crore
Exports: Crossed ₹2,00,000 crore
Despite this growth, ICEA argues that the 18% GST rate discourages smartphone penetration in smaller cities and rural areas. However, there’s no official indication yet that GST will be reduced anytime soon.
4. How GST on Mobile Phones Affects Consumers & the Economy
(a) Simplified Taxation & Transparency
GST has made pricing more predictable and eliminated cascading taxes, benefiting consumers and businesses alike.
(b) Impact on Affordability
An 18% GST significantly affects pricing. For example:
If a phone costs ₹20,000 pre-GST → Final price = ₹23,600
Lowering the GST to 5% would reduce the same phone’s cost to ₹21,000, boosting affordability.
(c) Boost to Domestic Manufacturing & Exports
India is now a global hub for smartphone manufacturing, but a lower GST would make “Make in India” products even more competitive internationally.
(d) Driving Digital Inclusion
With online banking, UPI, education, and telemedicine becoming mainstream, affordable smartphones are crucial for bridging the digital divide in India.
5. Benefits of Lower GST on Mobile Phones
If the government revises GST on Mobile Phones to 5%, the benefits would be transformational:
Benefit Impact on Consumers & Economy
Lower Prices Makes smartphones more affordable for all income groups
Higher Sales Increases consumer demand & accelerates replacement cycles
Digital Growth Promotes financial inclusion & e-learning accessibility
Boost to “Make in India” Strengthens India’s position as a global manufacturing hub
Export Expansion Improves competitiveness in international markets
6. Comparison Table: GST on Mobile Phones
Aspect Before GST After GST (Current) Proposed 5% GST
Tax Rate 12-15% (varies by state) 18% (uniform) 5% (proposed)
Phone Price (₹20,000) ₹22,000 ₹23,600 ₹21,000
Industry Exports ₹30,000 crore ₹2,00,000 crore Expected to grow faster
Digital Inclusion Limited reach Moderate growth Massive expansion.
Conclusion
The GST on Mobile Phones continues to stay at 18% in 2025, despite industry demands and broader reforms. While the current rate simplifies taxation, lowering GST to 5% could revolutionize affordability, boost manufacturing, and accelerate India’s digital transformation.
For now, consumers and manufacturers alike must navigate the unchanged rates — but industry leaders remain optimistic that future reforms will make smartphones more accessible to everyone.
Final Takeaway
If you’re planning to buy a new smartphone, keep GST in mind. The government may not have reduced taxes yet, but industry lobbying continues. The day GST on Mobile Phones drops to 5%, India could witness a massive digital boom.