In recent years, the popularity of iPhones in India has skyrocketed, despite their exorbitant price tags. iPhone users exhibit strong brand loyalty, driven by the perception of iPhones as a status symbol and their high-quality features. As luxury items, understanding the GST on mobile phones, specifically iPhones, is crucial for potential buyers.
This article will delve into the specifics of GST on iPhones, including their HSN code, the available input tax credits, and how these factors influence pricing.
Table of Contents
How Much is the GST on iPhone?
The GST on Apple iPhones in India is 18%, the same GST rate as other mobile phones. This rate is uniform across the country. It falls under the HSN Code 8517.
In addition to GST, customs duty is levied on iPhones, as most are imported from other countries. According to the 2024 Budget, imported iPhones in India are subject to a 15% customs duty.
Related Read: GST Rates for Common Goods and Services in 2024
How is the iPhone GST Rate Calculated? Pre-GST vs Post-GST
Particulars |
Row |
Pre-GST Rate |
Post-GST Rate |
| Cost of manufacturing | A | 70,000 | 70,000 |
| Customs duty @22% (Pre-GST) and @15% (As per Budget 2024) | B | 15,400 | 10,500 |
| Value for VAT/GST calculation | C = A + B | 85,400 | 80,500 |
| VAT @14% / GST @18% | D | 11,956 | 14,490 |
| Sale price to the retailer | E = C + D | 97,356 | 94,990 |
| Value addition by retailer | F | 2,000 | 2,000 |
| VAT @14% / GST @18% | G | 280 | 360 |
| Total price charged to the customer | H = E + F + G | 99,636 | 97,350 |
Note: The customer pays the final price of Rs 97,350. The GST has been applied twice at two levels in the supply chain: at the manufacturer level and the retailer level.
What is the GST Rate on Refurbished iPhones?
The GST rate for refurbished iPhones in India remains at 18%, but its application differs. When selling used iPhones, GST is calculated on the profit margin, not the full selling price. This applies if the iPhone’s condition hasn’t been significantly altered.
Real-Time Example for GST on Refurbished iPhones
To illustrate how GST is calculated on refurbished iPhones, consider the following scenario:
- Retailer A purchases a refurbished iPhone from the original user (User B) for ₹50,000.
- Retailer A then sells the iPhone to a second owner (User C) for ₹70,000.
In this case, the GST will be applied only to the profit margin, which is ₹20,000 (calculated as ₹70,000 – ₹50,000).
- The GST amount would be 18% of ₹20,000, which equals ₹3,600.
It’s important to note that no Input Tax Credit (ITC) should have been claimed during the initial purchase of the phone for this scenario to apply. This scenario underscores the financial benefits of purchasing refurbished iPhones while maintaining clarity on how GST is calculated in such transactions.
Input Tax Credit on iPhone
Input Tax Credit (ITC) is a provision that lets businesses reduce their tax liability by reclaiming a part of the tax paid on purchases, helping them recover some of the costs associated with acquiring capital.
For GST on iPhones, businesses can claim ITC as long as the devices are purchased for business use and all regulatory requirements are met. Key criteria for claiming ITC include having a valid GST invoice and purchasing from a registered supplier under GST.
Additionally, it’s crucial to understand that to claim an Input Tax Credit, the buyer must have received the iPhone, and the seller must have submitted their GST returns and paid the tax obligations to the government. The GST amount paid should also be recorded as ITC in GSTR-2B.
By adhering to these guidelines, businesses can effectively utilize ITC to lower their overall tax burden on the iPhone GST rate.
How to Claim GST on iPhone? A Step-by-Step Guide
Follow the steps to claim GST on iPhone
STEP 1: Purpose of Purchase: Ensure that the iPhone purchase was made for business purposes.
STEP 2: Registered Retailer: Buy the iPhone from a GST-registered retailer.
STEP3: Collect Documentation: Gather the following documents:
- Payment receipts
- GST-compliant invoices with:
- Dealer’s GSTIN
- iPhone’s HSN code
- Applicable GST rate percentage
- Total GST amount
STEP 4: Timely Claim: Submit your GST claim within the same financial year as the purchase.
STEP 5: File GST Returns: Use the GST portal to file your returns, including the claimed input tax credit.
Conclusion
Understanding GST on iPhones is crucial for businesses. The uniform 18% rate allows for better budgeting and pricing strategies. Detailed calculations and the ability to claim ITC can significantly reduce tax liabilities. By being informed about these financial aspects, businesses can make more profitable decisions and remain competitive in the market.
Frequently Asked Questions (FAQs)
1. How much tax is applied to iPhones in India?
The GST on iPhones is set at 18%, in addition to any applicable Customs Duty, as most iPhones are imported.
2. What is the GST rate on iPhone 16 Series?
The newly launched Apple iPhone 16 series is subject to an 18% GST.
3. What is the GST on iPhone 15 Series?
The GST on the iPhone 15 is 18%, which follows the standard rate for all iPhones.
4. What is the GST on the iPhone 15 Pro?
The GST on the iPhone 15 Pro is also 18%, consistent with other iPhone models.
5. How much GST is applied to iPhone 14 Series?
Similar to other models, the GST on the iPhone 14 is 18%.
6. What is the GST on the iPhone 14 Pro Series?
The iPhone 14 Pro carries the same GST rate of 18%.
7. What is the GST on iPhone 13 Series?
The GST for the iPhone 13 is likewise 18%.
8. What is the tax on imported iPhones in India?
Imported iPhones incur both Customs Duty at 15% and GST at 18%, which can significantly affect the overall cost.
9. Why do iPhone prices vary in different countries?
iPhone prices vary due to several factors, including local taxes (like GST), import duties, currency fluctuations, and pricing strategies adopted by Apple in different markets.
