New Delhi, Aug 19 As the country awaits GST rate rationalisation, the India Cellular and Electronics Association (ICEA) on Tuesday called for the inclusion of mobile phones and components in the 5 per cent GST slab reserved for essential goods.
Calling the current 18 per cent GST slab "regressive", ICEA argued that mobile phones, essential for digital access for over 90 crore Indian citizens, should be classified as 'necessities' in the upcoming GST reform.
“The mobile phone is no longer an aspirational good; it is an essential digital infrastructure for education, healthcare, financial inclusion, and governance. It should rightly be taxed at 5 per cent GST, in line with the Prime Minister’s GST reform agenda and his vision of a $500 billion electronics ecosystem,” said Pankaj Mohindroo, Chairman, ICEA.
India cannot create an inclusive Digital India if the devices that enable it remain unaffordable for millions. Placing mobile phones in the 5 per cent GST slab will restore affordability, stimulate demand, and accelerate India’s journey towards universal digital access, Mohindroo added.
The Central government has mulled reducing the current four-slab structure into two primary rates — 5 per cent and 18 per cent — while introducing a special 40 per cent slab for luxury and sin goods.
Around 99 per cent of items currently taxed at 12 per cent are expected to shift to the 5 per cent bracket, while 90 per cent of goods in the 28 per cent slab, including white goods, are expected to shift to the 18 per cent slab.
Domestic annual consumption of mobile phones has decreased from nearly 300 million units to around 220 million units since the GST increase to 18 per cent in 2020, ICEA noted, adding that the Indian market has huge room to grow if rates are slashed.
Boosted by the 'Make in India' initiative, mobile phone production grew from Rs. 18,900 crore in FY15 to Rs. 5.45 lakh crore in FY25, and its exports crossed Rs 2 lakh crore, positioning India as the second-largest mobile phone manufacturer in the world.
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