GST on Mobile Phones

GST on mobile phones is a subject of in-depth discussion in India. Mobile phones are essential these days. From communication, online payments, to education and entertainment. From news and updates to fashion and luxury.

Everything depends on smartphones these days. 

So, it is needless for me to say how important mobile phones are.

Hence, you need to understand how GST on mobile phones works here.

Before the GST regime, mobile phones were taxed under different tax structures.

The amount is inclusive of VAT, service tax, and excise duty.

After GST came, the tax system is now more precise.

Are you planning to change your mobile phone?

Are you someone who does not have much knowledge about GST on mobile phones? Then sit tight.

This blog is your ultimate guide to know everything about GST on mobile phones.

Let’s read together and explore the information.

What is GST on electronics?

Before knowing the GST on mobile phones, you need to learn about GST on electronics.

It is:

• An indirect tax
• You have to pay GST on the supply of goods and services
• The GST rate on electronics depends on item classification
• This is decided under the law
• You can get frequent updates from the government
• As a result, you can see different GST rates on electronic items over time
• The variation depends on the item’s use, type, and size

What are the GST rates on Electronics as of 2026?

As I told you, there are frequent updates on GST rates from the government.

According to the last update on 22 September 2025, the GST rates on elctropnic as follows:

GST on Mobile Phones in India

In India, you need to pay GST on mobile phones.  In simple words:

1. You need to pay 18% GST on mobile phones
2. It raises the total price by 18% in terms of actual cost
3. In September 2025, the 56th GST council meeting confirms this
4. The import duties on phone materials are enhancing the price, also
5. Before the GST regime, the smartphone prices were not fixed
6. The tax rates vary from state to state
7. However, the GST rate is 18% now
8. It applies across the country
1. The HSN code is 8517

The change in price after GST on Mobile Phones

There is a change you can see in terms of price. Here it is listed down for you:

• Pre-GST, you had to pay excise and VAT on mobile phones
• The VAT rate differs from state to state
• As a result, there was no uniform price for mobile phones
• Under GST,  a similar tax rate applies across the country
• Hence, now you can get a precise rate for mobile phones
• You need to pay 18% GST on mobile phones.

Now, let me tell you the prices before and after GST on mobile phones:

From this calculation, we can understand,

• Implementing GST on mobile phones has reduced the price
• The tax on tax effect is also eliminated here.

The types of GST applicable to Mobile Phones

For instance, let’s say MS Roy lives in Chandigarh. She is buying a mobile phone from a dealer in the same place. 

Since Chandigarh is a part of a union territory, she had to pay 9% CGST and UTGST 9%.

In contrast, if Ms Roy is buying the same mobile phone from a different state:

She needs to pay ISGT at 18%.

This applies to the e-commerce vendors also.

Here, you need to know about the nature of the composite supply also.

1. Under GST, the composite supply comes
2. It refers to two or more goods and services
3. When you are naturally supplying it during business
4. You cannot supply such items separately
5. In this case, one is the principal supply
6. Here, the dealers calculate GST rates in raising an invoice.

For instance, when you are buying a mobile phone:

• You are getting the charger and the USB
• It is essential for your mobile
• So, the GST rate is applicable to the mobile phone
• It also applies to the charger and USB cable

However,

• Some companies also sell earphones with phones
• It is not naturally bundled
• They classify it as mixed supplies

What are the GST on mobile phones and accessories?

The GST on mobile phones includes accessories also. You can find this under HSN chapter 85. So, here is the GST on mobile phones and accessories. It is given based on the HSN code:

This is as follows:

The value of supply in terms of GST on Mobile Phones

In this, you need to consider three things. The offer you get in exchange, the value of the supply and the exclusion after discounts.

Let’s understand these step by step:

(i) Value of  Supply

• Under GST, the value of supply refers to the money
• You (the seller) collect while selling goods and services to your buyers
• In related supplies, you need to pay GST on the transaction value
• It is the value that unrelated parties transact
• It takes place in the natural course of business

(ii) The exchange offer

• You will see that often the smartphone dealers give exchange offers
• Here, you can get your new phone
• For that, you need to exchange the old ones
• Please remember that here you are paying the differential sum
• The reduced sum is not taxable (under VAT)
• But now (Under GST), the exchange is included in the definition of supply
• So, you are also paying taxes on the reduced sum

For example, you are getting a new mobile phone. The price is 30000. You are exchanging an old phone.

Let’s say the price of the new phone is 35000 without exchange

Here, you need to pay GST on 35000

(iii) Exclusion of discounts

1. This includes trade discounts
2. Quantity discounts
3. It is a part of regular trade and commerce
4. Here, the discounts are recorded on invoices
5. It excludes the taxable value
6. However, there are two criteria:

1. When the discounts are there in the relevant invoices
2. ITC is reversed on the discount

It needs to be received as per the credit notes

Can anyone claim ITC on Mobile Phones?

Yes, you can claim ITC on mobile phones.  It is subject to some conditions. These are:

• Firstly, you are buying the mobile for business purposes
• Using the phone for business purposes only
• The tax invoice needs to be in the name of the company
• It needs to mention the address
• GSTIN
• GAT amount that you have paid
• HSN code
• The name of buyers’ company
• Address
• GSTIN (The buyer)

Besides this:

• There are other rules for claiming ITC
• The mobile needs to be received by the recipient
• The supplier needs to file their GST returns

Benefits of GST on Mobile Phones

The GST on mobile phones have a significant impact. These are:

• The GST brings uniformity in product prices
• It applies all over India
• Under VAT, you had to pay 5% tax on mobile phones
• It includes 1% excise duty
• For instance, in Gujarat, the tax rate was 14%
• Hence, the customers used to buy from the dealers (whose price was low)

Impact on Prices after GST on Mobile Phones

Under GST:

• 18% tax is charged across India
• However, the higher tax rates under GST still persist
• So, it makes the mobile phones a bit expensive

But you can get benefits from tax effects

GST on mobile phones: impact on the dealers

GST applicable to mobile phones has a direct effect on smartphone dealers.

   (A) Increasing Sales

• Today, mobile phones are essential
• Especially today’s generation, uses mobile phones as a part of their daily lives
• As a result, the sales are increasing with each passing day
• This benefits the mobile phone dealers with GST registration

    (B) Enhancing Competition

• Currently, you can see a precise price
• It is the result of standard tax rates
• This is applicable to the whole nation
• It advocates for healthy competition among the dealers

    (C) The loss of online benefits

• Earlier, the e-commerce dealers used to buy mobile phones
• From the states with lower tax rates
• This used to take place under VAT
• These dealers sold the phones in states where VAT was higher
• But today, GST on mobile phones has eliminated this
• You can find mobile phones online at lower prices
• The gap has lessened today.

Final Opinion

So, to end our discussion, I will say a few things. GST on mobile phones have simplified the tax for you.

I do agree that 18% GST on mobile phones is slightly high. But the overall system is simple, transparent and equally applicable for the nation.

The ITC is also available here. This eliminates multiple taxes.

GST on mobile phones improve supply chains and the traders.

Understanding GST on mobile phones helps you to make informed decisions.

So, what are you waiting for? If you still have some questions, contact Online Legal India.

FAQs

1. What is the applicable GST rate for mobile phones in India?

You have to pay 18% GST on mobile phones in India

2. Was GST on mobile phones always 18%?

No, mobile phones have not always attracted an 18% GST rate. It was 12% earlier. This was applied from April, 2020.

3. Does GST apply to second-hand mobile phones?

Yes, GST might apply to the second-hand mobile phones. It is calculated on the margin scheme.

4. I am an individual buyer. Can I claim ITC on mobile phones?

No, as an individual buyer, you cannot claim ITC on mobile phones.

5. Do I have to pay GST on mobile phones if I am importing them?

Yes, an 18% GST is applicable on mobile phones, in addition to Basic Customs Duty (BCD).

Disclaimer

This article is for informational purposes only and does not constitute legal advice. Online Legal India is a digital platform. If you require legal assistance, we strongly recommend consulting a qualified lawyer or law firm.