Finance Minister Arun Jaitley presented the Union Budget today and the budget brought about changes to a lot of sectors. While some reforms were introduced for the better, some have been left unchanged and in some places, the prices have increased. The one thing everyone wants to know after the budget is announced how have the changes affected the layman and how has his life improved or worsened. The one big change brought in the budget is the tax slabs. But then, while your tax slabs are set to reduce, the other things are set to go more expensive. Mobile phones and smartphones, which is something we all can simply not survive without are set to get dearer. And though it was not spelled out as clearly, the policies introduced are not in favour of imported devices and the rates are set to rise up.
While the rates of mobile phones are not set to increase by a wide margin and the percent increase is not more than 1 to 2 percent, it will definitely make a difference to the budget segment device lovers. The budget segment is the largest and the most sought after segment in India and it is bound to affect them. The government has made certain aspects of smartphones cheaper and some internals will now, if manufactured in India be cheap. But as most smartphones use internals and hardware that are imported, the rise in duties means hike in prices and thus, hike in the rate of the overall device. So while the completely Made in India smartphone (made from scratch) will get slightly cheaper, for all other devices, get ready for an increase.
The special additional duty (SAD) tax will be levied on printed circuit boards (PCB) whjch are important and form a part of every smartphone. The rise in the tax is by 2 percent and thus, that is the range in which your smartphone price will shoot up too. As the new move impacts only imports, it supports the Indian manufacturers and helps boost local product sales. On locally made pCBs, there will be no tax levied thus helping the domestic makers. While talking to Economic Times, ]Bipin Sapra, an indirect tax expert sais, “This is aimed at incentivizing manufacturing of PCB locally, which is major step towards bringing value addition to India.” Through this move, the government is also pushing forward their Make in India scheme.], which aims at bringing the global brands to India. Apple shows strong $18 million profit with the backing of strong iPhone sales, reverses slump
However, the one thing that is positive is that as globally, smartphone prices are dropping because their making costs are also going down. This means, the price of PCBs is already low and the entire 2 percent tax will not be passed on to the buyers. The buyers will see a hike of 1 percent or at the very most 2 percent, but nothing more than that. As more and more internal brands are set to enter India – Apple is in talks with the government for incentives to set up a Peenya plant and even Xiaomi and LeEco have almost finalised their local factory makers – the government needs to push Indian manufacturing further and this might be one way to bring in more and more smartphone makers to the country. While the pinch won’t be felt immediately, get ready to shell out extra each time you plan for a phone upgrade.