Will mobile phones get cheaper after GST rate cut? Here's what we know

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Centre's new GST rationalisation exercise has redrawn India’s indirect tax map, but mobile phone buyers will have to wait longer for relief. The Council has decided to keep the tax rate on mobile phones unchanged at 18%, even as other sectors witnessed sharp cuts.

People use Apple iPhones at the company's first retail store in Bengaluru.(REUTERS)

The 56th GST Council meeting, chaired by Finance Minister Nirmala Sitharaman, announced the biggest reform since GST was introduced in 2017.

The four-tier structure of 5%, 12%, 18% and 28% has now been collapsed into two slabs – 5% for essentials and 18% for standard goods. A special 40% rate has been reserved for luxury items and demerit goods such as high-end cars, tobacco, liquor, and online betting.

The reforms, effective from September 22, 2025, are being marketed as “Next-Gen GST” aimed at easing compliance, boosting consumption, and giving citizens a “Diwali gift” through cheaper essentials and services.

Impact on mobile phone prices

While consumers will benefit from reduced rates on products like soaps, shampoos, televisions, air-conditioners, bicycles, and renewable energy equipment, the Council decided to leave mobile phones at 18% GST. This means smartphones and feature phones will not see any price drop due to the reforms.

Industry bodies such as the India Cellular and Electronics Association (ICEA) had argued for lowering the GST on mobile phones to 12% or even 5%, citing their status as “digital necessities” in a rapidly digitising economy. According to ICEA, mobile devices are no longer luxury goods but critical tools for education, financial inclusion, and access to government services. However, the Council opted to maintain the 18% rate.

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