A joint paper by Grant Thornton Bharat and Policy Watch India Foundation recommends 5% GST for smartphones priced below ₹25,000, while retaining the existing rate for premium devices. It is a proposal, not an approved tax change: the GST Council’s recommendations from its 57th meeting on 8 October 2026 do not list a smartphone rate change.
What smartphone GST change does the paper propose?
The paper, titled “Reimagining GST for Affordable Smartphones: Enabling Digital Inclusion and Manufacturing Growth in India,” was launched by Policy Watch India Foundation on 1 July 2026. It proposes two price bands:
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| Smartphone price band | Rate proposed by the paper | Status |
|---|---|---|
| Below ₹25,000 | 5% GST | Recommendation by Grant Thornton Bharat and PWIF; not adopted by the GST Council. |
| ₹25,000 and above | Retain the existing rate; PTI reports the paper describes this as 18%. | Recommendation to retain the reported existing rate, not a new Council decision. |
The proposal is not for a universal 5% rate. The paper’s threshold is “below ₹25,000”; the available reporting does not clarify how a device priced at exactly ₹25,000 would be treated.
For the proposal and its stated terms, see PWIF’s announcement of the white paper and Hindustan Times’ PTI report.
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Is a 5% smartphone GST rate approved?
No. PWIF announced the paper on 1 July 2026, but the GST Council’s published recommendations from its 57th meeting, held on 8 October 2026, do not include a smartphone rate change. The Council’s 57th-meeting press release therefore does not establish that the paper’s recommendation was adopted.
The government’s 9 October 2026 overview describes the broad main GST rate structure as 5% and 18%, with a special 40% rate for select goods and services. That overview does not establish the product-specific smartphone rate. For a purchase or tax calculation, check the current official notification applicable to the handset; the product-specific notification was not available in the sources cited here. The reported 18% rate for phones should accordingly be understood as the rate described in the paper’s coverage, not as an independently verified statutory determination.
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Why do the authors want a lower rate on cheaper phones?
The paper argues that a uniform rate places a disproportionate burden on price-sensitive buyers and can limit digital inclusion. It presents affordable smartphones as “first-access digital infrastructure rather than discretionary consumer products,” a phrase attributed to the paper in GoodReturns’ PTI report.
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Its broader case links a lower rate to affordability, Digital India, financial inclusion and domestic electronics manufacturing. These are the authors’ anticipated benefits, not demonstrated effects of a tax change; the rate has not been changed under this proposal.
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Figures cited in coverage of the paper
PTI reporting attributes two approximate figures to the Grant Thornton Bharat–PWIF study:
- Nearly two-thirds of India’s handset shipments are in the sub-₹25,000 smartphone segment.
- Nearly 35 crore Indians continue to use feature phones.
The original dataset, shipment period and reference date for these figures are not stated in the available reporting. Treat them as study-reported context, not independently verified or official government statistics.
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What phone buyers should take from the proposal
- A handset below ₹25,000 has not automatically become subject to 5% GST because the paper recommends that rate.
- The paper proposes keeping the reported existing rate for premium devices rather than extending 5% to every smartphone.
- The 8 October 2026 Council recommendations do not announce this smartphone change; do not assume a tax saving or an implementation date.
- For a specific transaction, rely on the applicable current official tax notification rather than the proposal or a general overview of GST rates.
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