GST hike on mobile phones: Xiaomi, Poco devices get costlier in India, other brands likely to follow suit

The government of India recently hiked GST on mobile phones from 12 to 18 per cent, making all upcoming devices potentially more expensive.

You can now order a Xiaomi, Samsung or Vivo smartphone in India. (Photo credit: Reuters)

As expected, buying a new smartphone is getting ‘costlier’ in India. Xiaomi, which is currently India’s top smartphone brand has announced that it is increasing the prices of–possibly–all its smartphones effective midnight April 1, 2020. Xiaomi’s newly independent spin-off brand Poco has also announced that it is raising the price of its sole new smartphone, aka Poco X2, in India, also effective from April 1, 2020.

Xiaomi and Poco devices are getting costlier in India due to a number of factors. The biggest reason is the government of India’s recent ‘revision’ of GST rate on mobile phones and specific parts. The government of India recently hiked GST on mobile phones from 12 to 18 per cent, making all upcoming devices potentially more expensive. The revised GST rate comes into effect April 1, 2020.

Xiaomi and Poco are also keeping in mind the depreciating rupee even as the novel coronavirus outbreak continues to hit supplies – while increasing the prices of their smartphones in India.

Xiaomi said the new prices will reflect soon on which is its official online store. Poco has meanwhile shared updated prices of the Poco X2. While the 6GB RAM and 64GB storage version of the Poco X2 will now cost Rs 16,999 (up from Rs 15,999), the 6GB RAM and 128GB storage and 8GB RAM and 256GB storage versions will sell for Rs 17,999 (up from Rs 16,999) and Rs 20,999 (up from Rs 19,999) respectively.

Other brands are also likely to follow suit. Samsung instantly comes to mind here since the company had already confirmed during the launch of its last smartphone, aka Galaxy M21, that from April 1, 2020 prices may revise as per new GST rates.

A hike in GST on mobile phones during the time of an economic slowdown paired with the coronavirus outbreak will derail the industry and lead to job losses, industry body ICEA had said post the government’s announcement. ICEA is the same industry body that has also urged the government to allow online sales of smartphones and PCs as ‘essential’ services during the ongoing 21-day coronavirus lockdown in India.

“The 18 per cent GST hike will also bring back the bad old days of early 2000s when the grey market in mobile phones was rampant at 90 per cent. It reverses years of painstaking efforts by governments and industry to increase mobile manufacturing and penetration by sensible policy interventions and tax rationalisation,” ICEA Chairman Pankaj Mohindroo had said in a statement.

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First published on: 01-04-2020 at 11:58 IST