The GST, after all the hype and controversy, is finally out. Starting this month, the entire nation switches to a new tax system. What does this mean for your gadgets? Specficially, your laptops and desktops? Well, laptops and desktops are going to become more costly after introduction of the new Goods and Service Tax system implemented by the government.
Some GST Background
The Indian government made a landmark decision to introduce this single tax system as a way of centralizing the taxing laws under one single law. However, the central tax of 18 percent which has been levied by the government is higher than the earlier 14-15 percent.
The idea behind GST is to make taxation simple while creating a level playing field for everyone. Besides having one centralized tax to replace a number of indirect taxes that are currently imposed, with GST, the government can also ease the process of taxation.
The GST Effect
Related products such as printers will be under the Tax slab of 28 percent. The Manufacturers Association for Information Technology had recommended a rate of 12 per cent on PCs. This would have made computers cheaper and helped in increasing IT penetration. The sector has been segregated into two categories. One comprising products such as desktops and laptops, and the other covering items like monitors and printers
These reforms will also provide a level playing field to online and offline retailers of products. Till now, the brick and mortar stores incur a lot of services and end up paying VAT and service tax which they couldn’t cut off earlier.
The E-commerce Impact
However, Paytm Mall has unveiled a dedicated online store. The store will showcase a comprehensive range of affordable GST-ready solutions from HP and Lenovo. It is possible that this may act as a one-stop solution for every small and medium business (SMBs) in becoming GST-ready.
The GST bundle from HP is priced at Rs. 33,990 and comes with an Intel Core i3 processor laptop pre-installed with Microsoft Office, KPMG’S GST e-filing solution, 2 years of free data from Reliance Jio, 2 years of cloud storage, free registration & migration service, and dedicated compliance and tech support over-call.
Lenovo’s solution can be customized with two solution providers: IDOS or Marg and WeP Digital. Available at a starting price of Rs. 19,990 with easy EMI, customers can choose to get a 6-month free subscription of accounting.
The Road Ahead
The new regime is adamant on focusing all its energy on the fact that that parts are manufactured inside the country. This means that all the laptops which are being imported will have an extra tax levied on them. Obviously, this will make them more expensive than the products manufactured at home.
However, the impact of GST had also been visible on the inventory which had been set up earlier. Here, laptops were being sold at very high discounts to clear the way for the GST system. As much as 50 percent discounts on laptops had been announced by several retail chains who were looking to empty their inventories.
But, is GST a bad news for smartphones? Read it to find more.