Nokia 6
GST effect on Samsung, Nokia and Xiaomi phones: Will smartphone prices come down?Nokia

India is all set to roll out the Goods and Services Tax (GST) on various commodities, including consumer electronic goods, on July 1. Meanwhile, there seems to be a lot of confusion over the new pricing strategy for various products, including smartphones, which is a crowd favourite product.

Leading smartphone makers have assured people that the smartphones' pricing will not be impacted after the GST is rolled out, Economic Times reported. Samsung, Xiaomi, Oppo, Gionee, Intex and Lava have confirmed that "they have plans to absorb the impact from the new tax system that comes into effect" starting July 1.

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"There will be no impact on pricing," Gionee managing director Arvind Vohra told the publication.

Ashwin, the CEO of iVOOMi (a Chinese electronic company), also suggested a positive impact of GST on the e-commerce and mobile phone industry in a recent press release. He said:

"We see GST to bring in long term positive impacts in the smart phone fraternity and the e-commerce zone as well. Though there will be an increase in the prices for a short term causing discomfort to everyone, nonetheless, the far sighted impact of GST will remain positive for us.The present GST rules implicated business traders to involve in inefficient and prolonged systems. This prevented them from focusing on the right path to grow their trades. However, with current GST rules, the trade will definitely mature with implementations like — refund of duty, coming into execution, which did not exist in the current GST model.

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"The simplicity to trade across geographic boundaries will be catered to more effectively, thereby making it possible for every businessman to follow relatively robust, less cumbersome and seamless system to follow. Hence, to sum it up, iVOOMi sees the later as a positive augmentation to the way trade will take place."

Industry insiders have also suggested that Samsung is unlikely to hike the price of its existing phones under GST. However, newer phones that will be released after the GST rollout may see a hike of 4-5 percent, with GST rate fixed at 12 percent.

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Nokia has also sounded optimistic about keeping its smartphone prices under check, especially for the Nokia 6 and Nokia 5 handsets that have already been announced.

In its recent statement to Business Today, Nokia said, "The Nokia 6 and the Nokia 5 prices already take into account the GST tax rates. The GST rollout will not affect the prices of the Nokia phone that have been announced so far."

Mobile phone retailers across the country seem tentative about stocking up the new Nokia handsets, as the GST effect is likely to result in market fluctuations during the first few weeks.

Consequently, the Nokia 5 and 6 models may get a delayed launch, in anticipation of the GST effect, and the time required for stabilising the prices across the market.