GST on iPhone in India
Tax is one of the main factors that tends to bring the actual price of an iPhone to a particular level in India. However, numerous buyers tend to inquire how much GST is charged on iPhones once they realize that iPhones are priced considerably higher compared to some other countries.
Understanding the GST structure on iPhones can give buyers as well as businesses an idea of how prices should be and what compliance is needed.
GST Rate Upon iPhones in India
Any kind of mobile phone is covered under an 18 percent GST bracket in India in the Goods and Services Tax (GST) era.
- GST Rate Applicable: 18 percent
- HSN Code: 8517 (Telecommunication apparatus including smartphones)
This 18 percent tax has been applied uniformly to all smartphones. This includes entry-level devices or premium models.
GST on Imported iPhones
When imported into India, the tax structure tends to be even more complex when it comes to iPhones.
For imported iPhones, there are a few duties:
- Basic Customs Duty (BCD)
- Social Welfare Surcharge
- Integrated Goods and Services Tax (IGST) rate of 18%
Import duties increase the base value to which GST is applied. GST is higher due to the new value, which includes the abrogation of customs duty charges. The actual market price for the iPhone goes up by a hefty sum.
Capacity-affordable iPhones, subject to GST, import duties, and other charges, have a retail price in India beyond their original or launch price almost everywhere in the world.
Cost Components of an iPhone in India
The cost of an iPhone in India is mainly made of the following:
- Base price
- Customs duty (if imported)
- Social welfare surcharge
- GST at 18%
The value-added tax (GST) on an item is calculated after the import taxes and duties have been applied. This literally consumes further consumer money.
Government measures recently poured into home assembly have partially mitigated the impact of import taxes on some models.
GST on Refurbished iPhones
The positioning of refurbished iPhones from a GST perspective is anything but simple.
If the dealer has not accepted input tax credit (ITC):
- GST is calculated on the profit only
- Not on "selling price" — in the case of margin method
This means the margin method reduces the taxable value and thus makes it cheaper for consumers to buy refurbished cellphones.
Input Tax Credit (ITC) on the iPhone
Eligibility for ITC can be decided under the following criteria:
- It is used by the business
- A valid GST invoice must be in store
- The GST has been charged
Ineligible Cases:
- ITC is disallowed when GST is treated as a capital expenditure
- ITC is disallowed on goods used for personal use
So, for all registered businesses, iPhones bought for official business purposes are the most tax efficient way.
Why Are iPhones Expensive in India?
The high price as compared to other countries is mainly because of:
- 18% GST
- Import duties
- Currency fluctuation in exchange
- Margins of distribution, retailing, and value addition
While GST is the same for all phones, import duties play the greatest role in the pricing of phones.
Example: Applying GST to a Complete Phone
For an iPhone sold at ₹70,000 as base price:
GST @ 18 percent = ₹12,600
Final price = ₹82,600
In the case of imports, customs duties would be added to the base price before GST calculation.
Conclusion
GST application to iPhones in India is straightforward at 18 percent but is overridden by the import duties and other charges, which upswell the retail price. Should a business buy one such device, it will be eligible to claim an input tax credit, but individuals, who happen to be buyers, would have to shell out the full GST amount.
Knowledge about the tax structure helps buyers plan better for their stock options and decisions that essentially bear on their acquisition.