Mobile phones are likely to become cheaper as the Goods and Services Tax (GST) Council is reportedly considering a reduction in the 18 per cent GST imposed on handsets at its September 12 meeting, particularly against the backdrop of slowing demand in the mobile phone market.
The proposed tax cut comes as the Council prepares to meet after a gap of 374 days. Unlike its previous session, which was largely devoted to rationalising GST rates, the forthcoming meeting is expected to place greater emphasis on simplifying compliance for businesses and addressing persistent tax-related concerns.
Among the issues likely to come under scrutiny is the inverted duty structure, under which the GST paid on inputs exceeds the tax levied on the finished product. The Council may also examine measures to protect genuine purchasers who lose input tax credit when suppliers subsequently fail to discharge their tax obligations.
Another key proposal is greater automation in GST administration. Refund processing could move towards a risk-based automated system, drawing on data from the GST Network (GSTN) and e-invoicing records.
The accumulated Compensation Cess is also expected to feature on the agenda.
The meeting could therefore mark a broader effort to ease compliance, release working capital and reduce recurring tax disputes, alongside the proposed relief for mobile phone buyers.