GST implementation makes smartphones costlier

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Business: It’s been 36 hours since the government has rolled out the GST system. And the consumers have already started seeing the difference in price for various FMCG products. There was an increase in the tax rate applicable to the smartphones. However, many smartphone companies have commented on the GST saying that they will absorb the tax effect. This is done in order to make the smartphones still available with reasonable prices.

Oppo India, Xiaomi, and Indian phone manufacturer Lava have announced that they will not increase the prices of the smartphones. In return, they will reduce their profit margins. All the big smartphone players are reworking on their costing strategies in order to make the smartphones dearer to the consumer.

Gionee managing director Arvind Vohra said, ” There will be no impact on the pricing ” and indicated that the prices of Gionee smartphones will be totally unaffected. However, Samsung India and Intex have indicated that the prices might go up post-GST implementation.

Contrary to the existing trend the Cupertino-based phone manufacturer Apple and Taiwanese phone manufacturer have reduced their smartphone prices. Apple has slashed the price of the iPhone 7 Plus and iPhone 7 by six percent and the 32 GB variants are now made available at Rs. 67,300 and Rs. 56,200 respectively. And the iPhone 5 SE, Apple Watch, and Ipad had minor price cuts. Similarly, Asus has approximately slashed the prices of the Asus Zenfone 3, Asus Zenfone 3s Max and Asus Asus Zenfone 3 max approximately by fifteen percent.

Though different makers have expressed various views on GST, the true effect of the ‘ One Nation and One Tax system based GST ‘ will be known only after a couple of months pass.

 

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