The Goods and Service Tax council on Saturday decided to increase the GST rate on mobile phones and specific parts to 18 percent from 12 percent from April 1, PTI reported.
Media reports suggest that the development will result into increase in the retail price of mobile phones in India.
The ASP of smartphone in the fourth quarter of 2019 stood at an all-time high of $172, as shipments in $200-300 grew by 71.9 percent.
Smartphone ASPs stood at $163 in 2019, registering 2.8 percent growth with the sub-$200 segment still accounting for 79 percent of the market.
India’s smartphone market shipped 152.5 million units in 2019, with a modest 8 percent year-over-year growth. India also became the second largest smartphone market in 2019 after China but was still ahead of the USA.
Indian mobile phone market, with annual shipments of 282.9 million units, declined by 12.3 percent in 2019 due to fewer 4G feature phones.
India shipped 36.9 million smartphones in fourth quarter registering 5.5 percent growth but a 20.8 percent quarter-on-quarter decline.
The feature phone segment declined 21.1 percent with shipments of 30.1 million units in Q4 2019.
Xiaomi became the largest mobile phone brand in fourth quarter — ahead of Samsung and Reliance Industries with a market share of 16.0 percent and growth of 15.9 percent in the country, according to IDC.