With the increase in the use of laptops across the Country (for work and personal use), the GST rate on laptops was raised during the transition period (from VAT to GST). This was to boost the Country’s indirect tax collection. It became a matter of concern for businesses, and arguments were raised to lower the GST rate on laptops to build a Digital India.
In this article, we shall discuss the following:
The GST Council fixes the GST rates. All goods and services are taxed under the following tax slabs, which have been linked to different Harmonised System Nomenclature (HSN) codes- NIL Rate, 0.25%, 3%, 5%, 12%, 18% and 28%
Under Schedule VI, HSN Code no. 8471 specifies the following – ‘Automatic data processing machines and units thereof…’
Based on this, we can say that this HSN code accommodates laptops. Therefore, the rate of GST for laptops under this HSN code is 18%.
When a laptop bag is supplied along with a laptop, the bag becomes an ancillary supply, and the principal supply is the laptop itself. This will be treated as a composite supply, and the rate of tax on the bag will be the same as that of the principal supply, i.e., laptop. Hence the GST rate on the laptop bag will also be 18%.
Along with the laptop, additional peripherals may be purchased by a user. These may include monitors, printers, optical drives, external hard drives, pen drives, etc. The GST rate on these items are specified under Schedule VI. We have summarised it here for you:
|Name of the peripheral||HSN Code||Rate of GST|
|Monitor (Size < 32 Inches)||8528||18%|
|Monitor (Size > 32 Inches)||8528||28%|
|External Hard Drive||8471||18%|