NEW DELHI: India’s mobile and electronics manufacturers have urged the government to place mobile phones and their components in the 5% GST slab reserved for essential goods. The India Cellular & Electronics Association (ICEA), which represents the industry, stressed that the current 18% GST on mobile phones is regressive. It argued that mobile phones—the primary tool of digital access for over 90 crore Indians—must be treated as necessities in the forthcoming GST reforms.
“The mobile phone is no longer aspirational; it is essential digital infrastructure for education, healthcare, financial inclusion, and governance. It should rightly be taxed at 5% GST, in line with the Hon’ble Prime Minister’s GST reform agenda and his vision of a USD 500 billion electronics ecosystem,” said Pankaj Mohindroo, Chairman, ICEA.
In his Independence Day speech, Prime Minister Narendra Modi announced next-generation GST reforms focused on rate rationalisation and relief for essential items. Following this, the government is considering shifting from the current four-tier structure (5%, 12%, 18%, and 28%) to a simplified two-tier system of 5% and 18%.
ICEA highlighted that since the GST hike to 18% in 2020, annual mobile phone consumption in the country has fallen from nearly 300 million units to about 220 million units. This has hurt affordability, slowed replacement cycles, and disproportionately impacted volume growth. With 99.5% of mobile phones sold in India now manufactured domestically, the association said stronger demand would directly fuel production, deepen value addition, and enhance India’s global competitiveness.
The industry body also pointed out that India’s mobile phone sector has become one of the greatest successes of the Make in India initiative. Production has surged from ₹18,900 crore in FY15 to ₹5,45,000 crore in FY25, while exports have crossed ₹2,00,000 crore, making India the world’s second-largest mobile phone manufacturer.
ICEA further recalled that when GST was first designed in 2017, the Fitment Committee followed the principle of aligning GST incidence with the pre-GST tax burden to ensure continuity and avoid hardship. At that time, the combined excise duty and VAT on mobile phones averaged around 6%, aligning with the 5% GST slab. However, mobile phones were initially placed in the 12% slab as a transitional measure, before being increased to 18% in 2020—contradicting the original principle and undermining affordability. Notably, most states in the pre-GST era consciously capped VAT on mobile phones at 5%, recognising them as essential goods.
“Placing mobile phones in the 5% slab is not a concession; it is a correction. It restores the intent of the Fitment Committee and aligns GST design with the Prime Minister’s vision for digital inclusion,” Mohindroo emphasised.
“Placing mobile phones in the 5% slab is not a concession, it is a correction. It restores the intent of the Fitment Committee and ensures coherence between GST design and the Prime Minister’s vision for digital inclusion,” emphasised Mohindroo.