gst in india  

VAT Service Tax India
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Justification of GST
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Purchase Tax of GST
GST Rate Structure
VAT at the Central & State level
Goods & Services Tax Model For India
Central and State Taxes under GST
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Inter-State Transactions of Goods
Rules for CGST and SGST
Implementation of GST

GST Telecom Industry - GST rate on mobile handsets

It may be relevant to note that the taxation on mobile phones today, for valid reasons, has been kept at a minimum as would be evident from the following table:

1 Basic Customs Duty on import of mobile phones in India NIL
2 Additional Customs Duty in lieu of Excise (commonly known CVD)
on import of mobile phones in India
3 Additional Customs Duty in lieu of VAT (ADC) on import of mobile
phone in India
ADC is refundable on payment of VAT/ CST (subsequent sale)
4 Excise Duty on manufacturing of mobile phones in India NIL
5 National Calamity Contingent Duty (NCCD) of manufacture of
mobile phones in India
6 VAT on sale of mobile phones in most of the States in India 4%

The Central Government has developed the Zero duty policy dispensation after a great deal of thought and is foregoing both Customs duties and Excise Duties so as to curb the grey market and enhance economic growth. Further, most of the States are levying 4% VAT on sale of mobile phones.

India is a very price sensitive market which is driven by affordability of service. To ensure further spread of service, especially to the rural areas, it is important to have as low entry barrier as possible.

While the proposed dual GST may revolutionize the indirect tax regime, the proposed high tax rates/ structure, incase made applicable to telecom industry, would be a serious detriment to its growth. Since, the GST rate across the world has been kept at a lower rate and certain countries have provided preferential treatment to telecom sector recognizing that it is important not to discriminate against a sector of the economy that is recognized as a driver of economic growth (e.g.Sri Lanka, while the Standard VAT rate is 12%, supply of cellular phones are exempt from levy of VAT), it is imperative that the overall rate of GST on mobile handsets does not exceed the present level.


The Central GST be exempt on mobile handsets as at present Excise Duty is not levied and State GST be levied at a lower rate of 4% so that the present tax incidence on the mobile handset is not enhanced.


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