GST impact: Smartphone prices in India to soar up to 8 percent

Chinese smartphone maker Coolpad declared that the new Goods and Services Tax Bill would lead to an increase in the prices of smartphones in India. The CEO of Coolpad India, Syed Tajuddin said to PTI that considering the rate of the latest GST, smartphones are bound to cost about 7 to 8 percent more than the current selling price. As the Government of India prepares to announce, the GST rates, smartphone makers, dependent on imports are experiencing a moment of suspense. They fear that the current tax concessions offered by individual states may be put to an end after the central bill.

Syed Tajuddin also anticipates that the GST will generate a surge in online sales of smartphones. Additional taxation by a number of states had resulted in a slowdown of sales through online marketplaces for a couple of months. Taking everything into account, Coolpad has cut short its targeted sale of 4 million units to a new target of around 2.5 to 3 million handsets.

The company aims to bring three new smartphones in India within this year. All of the devices will be priced below Rs. 15,000 and provide excellent value for money. Similar to Xiaomi, Oppo, and Huawei, Coolpad aims to have a stronger presence in the offline market of the country. Most of the smartphone sales in India still comes from the offline sector.

Coolpad is collaborating with Amazon India to develop an offline sales model, where the latter serves as the primary distributor. Both the companies have contributed to the pilot project which will see Amazon as the supply products to retailers across the country. The initiative had just taken off last month, and results are expected in the next month that is September.

Recently, LeEco purchased a majority of the shares of Coolpad. Jia Yueting, the founder, CEO and Chairman of the former has now taken the post of Chairman of the latter. The companies have collaborated to be present simultaneously in a market and target different product niches. Coolpad India’s CEO has mentioned that this new deal will not be effective in India at the moment.

Recently, the company announced a brand new Coolpad Mega 2.5 in the country. The phone features a 2.5D glass covered display along with an 8 MP front camera and 3 GB of RAM. All this will cost just Rs. 6,999. The smartphone will be exclusively available in Amazon India by through flash sales starting from 24th August.

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