In a GST Council meeting headed by the Finance Minister Nirmala Sitharaman, the government has decided to shift mobile phones from 12 percent GST slot to 18 percent GST slot. This will directly hike the prices of cell phones in India, the sale of which has been on a boom ever since the internet prices in India have dipped to record numbers.
The govt’ also rationalized the GST rates on hand made and machine made matchsticks to 12 percent and slashed GST rate on Maintenance, Repair and Overhaul (MRO) services of aircraft from 18 percent to 5 percent.
“Mobile phones and specified parts to attract 18% versus 12%. All other items, if there’s a need to calibrate the rates, to remove the inversion, we can take them up at future, examination of that can happen at a later time,” said finance minister Nirmala Sitharaman.
The new rates will come into effect from April 1, 2020.
“The 6 per cent GST increase will be detrimental to the vision of ‘digital India,” said Pankaj Mohindroo, ICEA Chairman. “Consumption will be stymied and our domestic consumption target of $80 billion (Rs 6 lakh crore) by 2025 will not be achieved. We will fall short by at least Rs 2 lakh crore,” he said.