Why iPhone Prices Dropped In India After GST?

Goods and Services Tax (GST) promised to bring a positive reform in the Indian tax system and it was aimed to simplify the taxation process in the country. However, consumers were worried it will make basic goods and services costlier than before as the tax rates under GST seemed high. Soon after GST was implemented, technology giant Apple slashed prices for almost all its products including iPhones. This came as a surprise to consumers as many had misconceptions that GST would make mobile phones costlier.

In general, a higher GST rate doesn’t necessarily mean that a particular product or service will be costlier. To understand this concept better, take a look at this insightful explanation by SahiGST.

For iPhones and other imported phones, the tax rates were already pretty high before GST kicked in. Thus after 1st July, the 12% GST along with 10% custom duty levied upon iPhones is still quite less in comparison. This is the primary reason for price drop of iPhones after GST implementation.

Due to this, Apple now gets tax benefits which it has passed on to its consumers in the form of price cuts. iPhones have received a price drop of up to 7.2% in India after GST was introduced. However, Apple and other foreign smartphone brands still have to pay BCD (basic custom duty) of 10% along with GST which is imposed on all mobile phones imported into India. If that duty was exempted as well, iPhones would have been even more cheaper to consumers. But, Apple has started manufacturing its products in India and those would hopefully cost less as Made in India products won’t be levied additional custom duties.

 

iPhone 7 and 7 Plus

iPhone 7 Price (in Rs.) iPhone 7 Plus Price (in Rs.)

Storage size

32GB 128GB 256GB 32GB 128GB 256GB

Before GST

60,000 70,000 80,000 72,000 82,000

92,000

After GST 56,200 65,200 74,400 67,300 76,200

85,400

Change 6.3% 6.8% 7% 6.5% 7.1%

7.2%

 

iPhone 6S and 6S Plus

iPhone 6S Price (in Rs.) iPhone 6S Plus Price (in Rs.)

Storage size

32GB 128GB 32GB

128GB

Before GST

50,000 60,000 60,000

70,000

After GST

46,900 55,900 56,100

65,000

Change 6.2% 6.8% 6.5%

7.1%

 

iPhone SE

iPhone SE Price (in Rs.)

Storage size

32GB 128GB

Before GST

27,200

37,200

After GST 26,000

35,000

Change 4.4%

5.9%

 

Not only iPhones, Apple also dropped prices of all the other devices in its ecosystem including iPads, Macs and even the Apple Watch due to the same reason.

Were the price cuts after GST influential in your purchase of iPhone or any other Apple device? Let us know in the comments section below.