GST on iPhones: Rates, Calculation and All

Despite its premium pricing, the iPhone has become a popular smartphone choice in India. The Goods and Services Tax (GST) and applicable import duties are a significant factor contributing to its cost. Understanding these tax components is essential for consumers and businesses alike. In this article, we will learn about the GST rate on iPhones, types of GST involved, eligibility for Input Tax Credit (ITC), and the import duties that impact the final price.

How Much GST is charged on an iPhone?

In India, iPhones are taxed at 18% under the Goods and Services Tax (GST), which is the standard rate for all mobile phones and falls under HSN Code 8517. This GST is uniformly applied across the country and is included in the retail price when purchasing from authorised sellers.

In addition to GST, iPhones that are imported into India attract a 15% basic customs duty as per the Union Budget 2025. Depending on the situation, an additional 10% social welfare surcharge may also apply to the customs duty. These taxes and duties together make up a substantial part of the iPhone’s final cost in the Indian market.

Calculation of GST rate on an iPhone: Pre-GST Rate and Post-GST Rate

Here is a detailed conclusion of the GST rate on an iPhone pre and post-GST:

GST on refurbished iPhone

In India, refurbished iPhones attract an 18% GST. However, under Rule 32(5) of the CGST Rules, 2017, GST is calculated only on the profit margin—the difference between the selling price and the purchase price—if no Input Tax Credit has been claimed. This prevents double taxation on pre-owned goods and ensures refurbished iPhones remain more affordable.

Here’s a simplified example of how GST applies to refurbished iPhones:

• A retailer buys a refurbished iPhone for 50,000 Rs.
• The retailer sells the iPhone for 70,000 Rs.
• The profit margin is 20,000 Rs (70,000 – 50,000).
• GST is calculated at 18% on the profit margin (20,000 Rs).
• GST amount = 3,600 Rs (18% of 20,000 Rs).
• No GST is paid if there is no profit margin.

Input Tax Credit on iPhone

In India, businesses can claim an Input Tax Credit (ITC) on iPhones purchased for business use. ITC helps reduce the overall tax burden by allowing businesses to offset GST paid on purchases against their GST liability. To claim ITC on iPhones, the following conditions must be met:

• The iPhone must be purchased for business use.
• A valid GST invoice from a registered supplier is required.
• The buyer must have received the iPhone.
• The seller must have filed their GST returns and paid their tax to the government.
• The GST paid should be reflected as ITC in the buyer’s GSTR-2 B.

GST on iPhone and Related Accessories

Under GST law in India, the supply of an iPhone along with its charger is treated as a composite supply. This means the iPhone is the main product, and the charger is a part of it. The GST rate applicable to the iPhone (18%) is used for the whole bundle.

However, accessories like earphones are not naturally bundled with the iPhone. They are treated as mixed supplies. This means the highest GST rate among the bundled items applies. For earphones, the GST rate is 18%.

This distinction ensures that businesses and consumers pay GST based on how products are packaged and sold.

Import Duties and GST on iPhones in India

As per the Union Budget 2025, India has reduced the Basic Customs Duty (BCD) on mobile phones from 20% to 15% to make smartphones more affordable and support local manufacturing. The government also removed the 2.5% import duty on key phone components like PCBA, camera modules, and USB cables to lower production costs. These steps aim to boost India’s position as a global electronics manufacturing hub by attracting investment and promoting innovation.

Conclusion

To conclude, GST on iPhones and import duties significantly impact the final price you pay in India. Knowing the GST rates, import duties, and supply rules helps you avoid hidden charges. Whether you buy a new or refurbished iPhone or want to claim an Input Tax Credit, you need clarity on these taxes.

Navigating GST rates, and import duty structure can be complex. With Online Legal India's expert support, you can gain seamless compliance and peace of mind. Their expert will guide you throughout the process so you can focus on your business.