Since GST came in picture, it brought out many changes in various sector or industry. Here in this article, I will discuss what are some important impacts that GST has had on IT sector.
Although GST has had a good impact on various sector by cutting down rate to a lower level and yet there are other sectors as well that might put a little more load on your pocket due to GST.
IT sector is one of the sector that might not be as good as it was before because GST rollout likely to discourage people for buying new gadgets and mobile stuffs.
According to reports, this is not going to have good results for people who want to buy gadgets, as the tax on things like mobiles, DTH, Internet services, and so on are likely to go up. This will also have an impact on the Make in India initiative, as phones being assembled in India were significantly cheaper thanks to lower duties. With GST, phones will become available with a duty of just 12 percent, compared to 17 to 27 percent earlier so imported phones should get cheaper.
However, phones Made in India will get more expensive, as they currently pay around 7.5-8 percent. With GST, these phones will also fall under the 12 percent slab, as will parts for manufacture.
This means that phones in general will become a little more expensive, and it will likely also make it more attractive for brands to manufacture their devices outside of the country, unlike the scenario today.
“Almost four out of five mobile phones shipped were made in India during Q1 2017,” pointed out Counterpoint Research. “The imposition of the Goods and Services Tax (GST) will have an impact on domestic manufacturing and the government will need to continue incentives for locally manufactured mobile phones to further push the domestic manufacturing ecosystem.”
Game consoles and the games themselves are currently charged a 28.5 percent duty. Under GST, these will fall under the highest slab, of 28 percent, according to details found online. Expect prices to remain unchanged on that front.
For TVs and computers, things seem to be a little less clear. We came across details for parts, some of which fall under the 18 percent slab, and some under the highest 28 percent. Presently, you’re paying 26.5 percent on laptops and televisions, while computer parts attract 10.3 percent, so this would imply that PCs and laptops and TVs are all going to get a little more expensive in India once the GST is in place.
For televisions, refrigerators, washing machines and air-conditioners, the effective tax rate under old taxation system was around 26% including all cases which has now gone up to 28% under GST, with all companies proposing a price hike of 2-3%. So, retailers selling on backdated bills are pitching it as a bargain deal for consumers.
So overall GST has some mixed effect on all industry including tech industry as well.