Telephones and Radios

[Guest]

TELEPHONES: As per GST rules, Mobile Phones are classified under Clause 1 of Heading 8517 (Page 175). So GST rate is 12%.

At the same times, Landline Phones (corded phones) are under Clause 7 of Heading 8517 (Page 177). So GST rate would be 18%.

Presently Landline phones are under Heading 8517 and VAT is 5%. For MSME units, with turnover less than 1.5 Crores, Central Excise is exempted.

Now everyone including MSME will have to pay 18% GST on Landline Phones. Cost of these telephones generally between ₹ 300 - 700. Mobile phones are with 12% GST.

Please clarify this anomaly.

AM/FM RADIOS: Presently these Radios which are generally indigenous products are made by small units in MSME or tiny sectors. Price range is between ₹ 200 – 600. VAT is 5%. For MSME units, with turnover less than 1.5 Crores, Central Excise is exempted.

These types of radios because of low prices, are very popular in rural areas especially after the Prime Minister’s “Mann Ki Baat” programme.

Now we understand radios are classified under Clause 18 of item 8527 (Page 179). Therefore GST rate would be 28%. So from VAT 5% it will become 28% GST.

Kindly clarify if our contention is correct.

Regards,

Capt Kuldeep Khera

email: [email protected]

AI Summary

Discrepancies in GST Rates: Mobile Phones at 12%, Landlines Jump to 18%, AM/FM Radios Soar to 28% Affecting MSMEs. A discussion on the Goods and Services Tax (GST) rates for telephones and radios reveals discrepancies in tax rates. Mobile phones are taxed at 12% under GST, while landline phones are subject to an 18% rate, up from the previous 5% VAT. This change affects MSMEs, which were previously exempt from Central Excise. Similarly, AM/FM radios, popular in rural areas, are now classified under a 28% GST rate, significantly higher than the former 5% VAT. The respondent confirms the increased tax rates and suggests potential changes during finalization.