GST Rate Hike Jacks Up Prices of Smartphones in India
Smartphone companies such as OPPO, Realme, and Samsung have announced that their phones have gotten costlier in India. The moves come two weeks after finance minister Nirmala Sitharaman increased the GST rates from 12 percent to 18 percent.
The increased GST on phones has come into effect from 1 April.
Xiaomi India MD Manu Kumar Jain announced on Twitter that the company has increased the price of phones with immediate effect. The increased prices will be applicable across all Xiaomi brands – Mi, Redmi and Poco phones.
The Poco X2 (Review) (6 GB+128 GB) model, which could be earlier bought at Rs 16,999 on Flipkart, now costs Rs 17,999.
Redmi K20’s 6 GB + 64 GB version has seen a price rise of Rs 2,000 on Flipkart, while the price of the Redmi K20 Pro (Review) 6 GB + 128 GB variant has also gone up by the same amount. Meanwhile, Realme has also said that it was increasing the prices of its smartphones.
The company said in a statement that the coronavirus pandemic coupled with the fluctuating value of the Indian rupee has increased the input cost of smartphones. Realme 6’s 4 GB RAM + 64 GB variant was launched in India for Rs 12,999, but is now priced at Rs 13,999. Similarly, the price of Realme C3 and Realme 5i (Review) have been hiked by Rs 1,000 each. Realme C3 which earlier cost Rs 6,999, is now available at Rs 7,499. On the other hand, the price of Realme 5i has been increased from Rs 8,999 to Rs 9,999.
OPPO has also joined the bandwagon and hiked prices of its smartphone to compensate for the increased GST. The company said, “We respect the decision from the GST (Goods and Services Tax) Council, after serious consideration, we will be revising the prices of our products from April 1, 2020, across all platforms. We will keep monitoring the market situation and pass on the benefits to our consumers in our endeavor of bringing the best products to them at an affordable price range in the future”. However, there is no official announcement from OPPO yet on what exactly the new prices of its devices will be.
The industry body India Cellular and Electronics Association (ICEA) also stepped in and said that new rates will put the burden on the industry. There will be a burden of Rs. 15,000 crore on the industry, ICEA has estimated. The firm also added that there will be a job loss, and it will affect the companies that are planning to invest in India.