GST on Electronics – Updated Tax Rates & Billing Rules Explained

Ramesh recently purchased a new washing machine for ₹28,000. At checkout, the final bill showed a total of ₹33,040, which included ₹5,040 in GST at 18 per cent. This reflects the current GST regime on electronics, where tax rates range from 5 per cent to 28 per cent, depending on the product category.

This blog explains how GST affects electronic and electrical items, from mobile phones to industrial machinery. Each section includes a practical example to make the tax structure easier to understand.

What is GST on Electronics and Electrical Items?

The government replaced older taxes, such as VAT, excise duty, and service tax, with the Goods and Services Tax (GST) to simplify indirect taxation. However, this shift has often increased the overall cost of electronic goods. GST on electronics is spread across five tax slabs: 0 per cent, 5 per cent, 12 per cent, 18 per cent, and 28 per cent.

Example:

Seema purchased a mid-range smartphone for ₹20,000. With 18 per cent GST applied, the final price came to ₹23,600. Under the previous tax regime, she might have paid approximately ₹22,000, depending on local VAT and excise duties. This difference reflects a noticeable rise in the cost of everyday electronics due to GST.

How Are GST Rates on Electronics and Electrical Items Classified?

GST on electronic goods is not one-size-fits-all. Classification is based on:

• Utilisation – industrial or personal
   
• Size and capacity – higher-rated appliances often attract more tax
   
• Perceived luxury – essential vs non-essential items

Example:

Amit runs a welding workshop. When buying an industrial oven worth ₹1,00,000, he had to pay an 18% GST, adding ₹18,000 to the bill. However, his neighbour, Neha, who purchased a solar lantern, paid just 12% GST. The usage and nature of the item led to vastly different tax implications.

Electrical and Electronics Items Subject to 0% GST

At present, no mainstream electrical or electronic items are taxed at 0% GST. This means whether it's a basic mobile charger or a fully automatic washing machine, some GST is always applied.

Example:

Priya was hoping to save money on her purchase of a basic wired landline phone. However, she learned that even such simple electronics are taxed under GST, eliminating any expectation of a tax-free buy.

Electrical and Electronics Items Subject to 5% GST

The government has incentivised eco-friendly technologies with reduced GST.

Example:

Rajesh invested in an electric scooter worth ₹90,000. Thanks to the 5% GST rate, he paid an additional ₹4,500 in tax. Under older tax systems, this might have ranged between 8–12%. The lower rate under GST saved him a few thousand rupees.

Items taxed at 5% include:

• Electric Vehicles (HSN 87)
   
• EV Chargers (HSN 8504)

Electrical and Electronics Items Subject to 12% GST

GST at 12% is generally applied to items contributing to renewable energy, medical utilities, or those seen as promoting sustainable living.

Example:

Sunita runs a homestay in a rural area. She installed a solar water heater priced at ₹25,000. With 12% GST, she paid ₹3,000 in tax, bringing her total to ₹28,000. She considered this a fair deal for an environmentally conscious choice.

Items taxed at 12% include:
 

• Solar water heaters
   
• Biogas plants
   
• Solar-powered devices
   
• Wind energy equipment
   
• Medical instruments

Electrical and Electronics Items Subject to 18% GST

This is the most common tax slab for electronics, especially household and office-use items. These aren’t considered luxuries, but are not essentials either.

Example:

Mohit recently bought a laptop for ₹50,000 to support his freelance design work. After adding 18% GST, he paid ₹59,000. While the product itself was reasonably priced, GST made a noticeable difference.

Items taxed at 18% include:
 

• Refrigerators
   
• Mobile phones
   
• Televisions (up to 32 inches)
   
• Laptops and printers
   
• Washing machines
   
• CCTV cameras
   
• Electrical transformers
   
• Hairdryers, electric irons
   
• Office machinery like note counters

In most cases, consumers should mentally factor in an additional 18% over the displayed price.

Electrical and Electronics Items Subject to 28% GST

Electronics perceived as luxury or high-end items are taxed at the highest GST slab of 28%.

Example:

Karan upgraded his living room with a 50-inch 4K smart TV worth ₹80,000. However, 28% GST meant he paid ₹22,400 in tax, raising his bill to ₹1,02,400. This was a considerable jump, one he hadn’t budgeted for.

Items taxed at 28% include:
 

• Air-conditioners
   
• Dishwashers
   
• Televisions larger than 32 inches
   
• Monitors and projectors
   
• Electrical ignition equipment
   
• Electric accumulators

Such items are often targeted with higher GST to discourage overconsumption of luxury goods.

Impact of GST on the Electronics Industry

The GST rollout has brought major shifts in the electronics sector:

Example:

Dinesh, who runs a medium-sized electronics showroom, used to pay VAT at 14.5% and manage multiple state-level taxes. Post-GST, he now deals with a single 18% GST across the board. While the rate is slightly higher, compliance is far simpler and more transparent.

Benefits:
 

• Unified taxation across India
   
• Simplified logistics and warehousing
   
• Transparent pricing

Challenges:
 

• High GST on luxury goods discourages purchase
   
• Increased costs have reduced margins
   
• Domestic manufacturers face tough competition from low-tax imported electronics

Impact of Electronics Item GST Rate on Business Owners

Business owners have had to adapt to GST through new systems, registrations, and filing structures.

Example:

Anjali, who sells imported kitchen appliances online, had to overhaul her pricing strategy. With items like dishwashers attracting 28% GST, she had to revise her listings and absorb some cost increases to stay competitive.

Key concerns include:
 

• Staying GST compliant with accurate invoices
   
• Claiming Input Tax Credit (ITC) to offset expenses
   
• Adjusting final product pricing to remain profitable

Not following correct GST practices can lead to loss of ITC and legal penalties.

Impact of Electronics Item GST Rate on Consumers

Consumers have seen a noticeable increase in the price tags of electronics.

Example:

Devika planned to buy an AC before summer. The sticker said ₹35,000, but GST at 28% added ₹9,800, taking her total to ₹44,800. She delayed her purchase due to the cost shock.

This behaviour is common among price-conscious consumers. GST has:
 

• Made high-end electronics less affordable
   
• Encouraged buyers to seek deals or postpone purchases
   
• Increased second-hand market demand for big-ticket items

Consumers must now calculate GST-inclusive costs when budgeting for electronics.

Conclusion

GST has made India’s taxation more transparent and structured, especially in electronics. However, the higher slabs of 18% and 28% have increased retail prices, impacting both consumers and sellers.

For businesses, the focus is on compliance, competitive pricing, and claiming ITC. For consumers, it’s about planning purchases more carefully, especially for high-value items.

Understanding GST implications benefits everyone, whether you are purchasing a simple fan or setting up a solar-powered business unit.

FAQs

Q1. What is the GST rate on mobile phones in 2025?
Mobile phones attract 18% GST under HSN code 8517.

Q2. Are refurbished electronics taxed under GST?
Yes, refurbished electronics are taxed under the applicable slab based on the product type.

Q3. Why are air conditioners taxed at 28% GST?
Air-conditioners are considered luxury items and therefore taxed at the highest slab of 28%.

Q4. Can businesses claim an Input Tax Credit (ITC) on electronics?
Yes, businesses registered under GST can claim ITC on purchases used for business operations.

Q5. Do any electronics have 0% GST?
No. As of now, no electronics fall under the 0% GST bracket.

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