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Smartphone GST India: Paper proposes 5% rate under Rs 25,000, 18% for higher-priced devices
A joint paper by Grant Thornton Bharat and the Policy Watch India Foundation recommends a differentiated smartphone GST in India: 5% for devices priced below Rs 25,000 and 18% for higher-priced models. The authors say this would improve affordability for first-time buyers and support Digital India, financial inclusion, and electronics manufacturing goals.
A new paper by GT Bharat and Policy Watch India Foundation has urged a change in GST on smartphones. It said phones priced below Rs 25,000 should attract 5 per cent GST. It added that the 18 per cent rate could continue for costlier models. The paper argued the current flat 18 per cent no longer suits India’s digital needs.
/img/2026/07/india-smartphone-gst-cut-5-percent-under-rs-25000-proposal-1782916815815-600x338.jpg "Smartphone GST cut under Rs 25,000")
The whitepaper said smartphones should be treated as basic digital access tools. It described them as "first-access digital infrastructure rather than discretionary consumer products\". It said a lower rate for affordable devices could support Digital India goals. It also linked the proposal to financial inclusion and electronics manufacturing priorities.
GST on smartphones and affordability in India
The study said a single rate for all smartphones creates an uneven burden. It stated that taxing entry-level and premium phones at the same rate harms buyers. It said the impact falls most on people who depend on low-cost phones. The paper added that this group plays a key role in digital inclusion.
The sub-Rs 25,000 segment makes up nearly two-thirds of India’s handset shipments, it said. It added that this market serves first-time buyers and price-sensitive users. The paper listed rural households, women, students, and lower-income consumers. It also noted that about 35 crore Indians still use feature phones.
GST on smartphones compared with other countries
The paper said India charges one of the highest indirect tax rates on smartphones. It compared India with other electronics manufacturing economies. It named Vietnam, Thailand, Indonesia, and Malaysia as examples. It said these countries use lower tax structures. It added that such policies support adoption while keeping manufacturing competitive.
GST on smartphones and policy goals
The paper said the proposed split rate should not be seen as industry relief. It called the move a \"strategic policy intervention\" tied to national objectives. It said the aim is to align taxation with India’s digital transformation plans. It also linked the idea to manufacturing ambitions and long-term economic goals.
With inputs from PTI
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