Planning to buy a mobile phone or a tablet soon? If all goes as planned by telecom minister Kapil Sibal, mobile phones and tablets will be declared as goods of special importance under the Central Sales Tax (CST) Act. Simply put, this may lead to the prices of these gadgets dropping by 7 to 8 percent.
Sibal, who has written to a committee of state finance ministers with this proposal, sees great potential in mobile phones and tablets and considers them tools leading to the overall development of the country. Quoting a source, a PTI report adds, "Considering the huge potential that mobile phones and tablets have in transforming the overall development of the country... Sibal has requested that the Empowered Committee of the State Finance Ministers may consider the proposal to declare mobile phones and tablets as goods of special importance under the CST (Central Sales Tax) Act of 1956."
Could become cheaper soon (Image credit: Getty Images)
Sibal has also requested state chief ministers to include mobile phones and other electronic products used for Internet access under the category as approved under National Policy on Electronics, 2012. As it stands now, most states levy a tax over 12.5 percent on mobile phones. State governments, at present, can levy a maximum of five percent tax on any product included in the 'good of special importance' category under CST Act.
Reports quoted Indian Cellular Association (ICA) President Pankaj Mohindroo as saying, "If states act on this request of the telecom minister, the price of mobile phones and tablets in most of state will come down by 7 to 8 per cent. This will be in states like Maharashtra, Gujarat, Tamil Nadu, Chattisgarh, Madhya Pradesh."
Mohindroo added that states such as Delhi have a system of dual taxing, whereby taxes are levied based on the number of units sold in the state.
He added, "Many Chinese phones sold in grey market don't pay VAT (Value Added Tax). It is very ironical to see that a laptop costing Rs 1 lakh is taxed at 5 per cent rate where as mobile phone which comes at low price is taxed at rate of more than 12.5 per cent in many states."
If things go as planned, the masses would be encouraged to pick and choose their gadgets without worrying much about their prices.
These reports come close on the heels of another announcement by Sibal, the one to further reduce the cost of the Aakash tablet. Speaking at an event in the national capital, he said, "I asked Rajat Moona (director general, C-DAC) to help us in Aakash. Let us take that Aakash to the people of this country for a sum of Rs 1,500. Each student must have a Aakash in his/her hand so that they can see the world with it."
Sibal opined that there is a need to obtain the know-how to offer cutting-edge technology at affordable prices to the masses. He believes that the Centre for Development of Advanced Computing (C-DAC) should develop such technologies.