Mobile phone makers are seeking a reduction in the goods and services tax (GST) to 5 per cent from the current 18 per cent, arguing that a cut would spur demand in a category that has remained stagnant at 150 million units a year for the past four years. Higher GST rates have strained companies’ working capital and added to cost disabilities in manufacturing, weakening India’s competitiveness.
Industry bodies representing device makers had earlier this year petitioned the finance ministry for a shift to 12 per cent, as the government reviewed GST rate slabs. But Prime Minister Narendra Modi’s August 15 announcement on GST reforms and reducing the burden on the common man has renewed the push for the lowest slab.
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