The GST Council has placed mobile phones under the tax slab rate of 12% which will make locally manufactured mobile phones costlier while, imported phones will become cheaper. Unless the government offers sops to local manufacturers, this decision will have an adverse effect on ‘Make in India’ and lessen the initiative’s attractiveness. Presently, local manufacturers are benefiting from the duty differential levied on phones.
However, the Government is planning on levying a basic customs duty on mobile phones to maintain the duty differential between locally manufactured and imported phones. A final call is yet to be taken on this subject though manufacturers hope to receive clarity before implementation of GST on July 1.