Question

impact of gst on electronics industry

Answer 1

GST impact on electronics industry is slightly negative as there are many products which are liable to be under lesser tax slab but still reeling under heavy tax pressure. As many electronics products are consumer durables which are now daily used items even in the low-income families, this notion must be relieved that the electronics are still the luxury product. Just for an example, the government has put the washing machine into the highest tax slab i.e. 28 percent which in no way justifies the taxing strategy.

GST being a new indirect tax reform brought a complete change in our economy. It leads to a great impact on the Gross Domestic Product (GDP) of our country.

The GST attracts additional tax rate over the electronic items of about 4 to 5 percent. Earlier it was 23 to 28% with cumulative tax (excise and value-added tax) and this time as the tax rates are set 18 to 28 percent on the electronic goods, this will severely impact the rising electronic consumerism in the nation.

But still, Domestic electronic manufacturers are still under the budget in front of their MNC counterparts and have kept prices low in front of the higher GST rate of 28%. They have lowered the discounts and margins in order to keep the prices in check and have maintained the decency in the market.
It is expected that the electronic manufacturing in the domestic counterpart is much more feasible now after the GST application. This time it is speculated that the electronic manufacturer can provide the tax profits to their customers after the GST.

Electronics and technological tax compliance can go hand in hand and it will create an environment which will suit the industry in near future. And after everything, the studies from major research companies suggests that the India will be the hub of manufacturing electronics.

The Indian Electronics industry welcomes the new structure of the GST regime as the same will bring the new era in the indirect taxation landscape of modern India, paving the way for a simplified tax structure for goods and services. GST not only eliminates multiple levies but it will also allow deeper penetration of digital services into the consumerism of India.