GST on Laptops
On July 1, 2017, the Indian government introduced the Goods and Service Tax (GST) to simplify the tax system. Before GST, there were various taxes like Service Tax, VAT, Central Excise, and Entertainment Tax imposed by state and central governments on customers.
With GST, tax filing became much easier for all Indian citizens, and it aimed to get rid of double taxation. GST is applied to all levels of production, from manufacturers to end consumers, ensuring that the end customer only pays tax on the value added. This change was widely appreciated and revolutionized India’s taxation system, impacting every sector differently.
GST introduced different tax rates, or “slabs,” for various products and services, including the IT sector, which is rapidly growing in India. In today’s digital age, laptops and computers are essential for students, employees, business owners, and everyone else.
However, the GST rates on laptops have increased over time, leading to higher laptop prices. So, it’s important to understand the details of GST on laptops and their corresponding HSN codes.
What Was the Tax on Laptops in The Pre-GST Era?
In the time before GST, the tax on laptops was called VAT, which stood for Value Added Tax. VAT was applied to the sale of all laptops, and the tax rate varied from 14% to 15%, depending on the state where the laptop was sold. This meant that the tax on laptops differed from one place to another.
Now, let’s discuss GST, which stands for Goods and Services Tax, and how it affects laptops. Under the current system, GST is imposed at a standard rate of 18% on the sale of laptops. It’s worth noting that the GST rate for laptops was initially set at 15%, but it was increased a few weeks ago. This increase in the GST rate has resulted in laptops becoming more expensive compared to the pre-GST era when VAT was applied.
The reason laptops used to be cheaper in the pre-GST era is that the VAT rate was lower than the current GST rate. The introduction of GST was intended to streamline the taxation system in India, but it did lead to an increase in the tax rate for laptops.
HSN Codes for Laptops
To help you understand the classification of laptops and other computer devices for tax purposes, a system called HSN codes is used. HSN, or Harmonized System of Nomenclature, provides a standardized way to categorize goods for taxation. In the case of laptops and computer devices, they fall under Chapter 84 of HSN.
Here are the HSN codes for laptops and related computer devices:
- 8471: This is the HSN code for automatic data processing machines and units thereof, magnetic or optical readers, machines for transcribing data onto data media in coded form, and machines for processing such data, not elsewhere specified or included.
- 8471 30: This HSN code is for portable digital automatic data processing machines weighing not more than 10 kg, consisting of at least a central processing unit, a keyboard, and a display.
- 8471 30 10: This specific code is for personal computers.
- 8471 41: This HSN code is for other automatic data processing machines comprising, in the same housing, at least a central processing unit and an input and output unit, whether or not combined.
- 8471 41 10: Here, the HSN code refers to microcomputers.
- 8471 41 20: This code is for large or mainframe computers.
- 8471 41 90: This code is for other automatic data processing machines.
- 8471 49 00: This HSN code is used for systems presented in the form of systems.
- 8471 50 00: This code applies to processing units other than those of sub-headings 8471 41 or 8471 49, whether or not containing in the same housing one or two of the following types of units: storage units, input units, and output units.
- 8471 60: This code covers input or output units, whether or not they contain storage units in the same housing.
- 8471 60 10: This specific code is for combined input or output units.
- 8471 60 25: This code is for plotters.
- 8471 60 29: It covers other devices under the printer category.
- 8471 60 40: This code is for keyboards.
- 8471 60 50: It applies to scanners.
- 8471 60 60: This code is for mice.
- 8471 60 90: This is the code for other input or output units.
- 8471 70: This code is for storage units.
- 8471 70 10: It’s for floppy disc drives.
- 8471 70 20: This code is used for hard disc drives.
- 8471 70 30: It covers removable or exchangeable disc drives.
- 8471 70 40: This code applies to magnetic tape drives.
- 8471 70 50: It’s used for cartridge tape drives.
- 8471 70 60: This code is for CD-ROM drives.
- 8471 70 70: This specific code applies to digital video disc drives.
- 8471 70 90: Here, you’ll find other storage units.
- 8471 80 00: This code covers other units of automatic data processing machines.
- 8471 90 00: This code is used for other products not covered by the previous codes.
Understanding these HSN codes is essential for correctly classifying and calculating the GST for laptops and other computer devices.
To make this process easier, you can use a GST calculator to determine the amount of GST to be paid before registering for GST. This tool can help individuals and businesses ensure they are compliant with the tax regulations and accurately account for the GST on laptops and other computer devices.
What is the GST Rate on laptops and computer devices?
Wondering about the GST (Goods and Services Tax) rates on laptops and computer devices? We’ve got you covered with a simple breakdown of the rates for various equipment:
Laptops: The GST rate for laptops is set at 18%. So, if you’re in the market for a new laptop, you can expect to pay this rate as part of your purchase.
Desktop Computers: Just like laptops, desktop computers are also taxed at 18% under the GST system. So, whether you prefer a laptop or a desktop, the tax rate remains the same.
Desktop Monitors (Up to 32 Inches): If you’re looking to buy a desktop monitor with a screen size of up to 32 inches, you’ll be paying a GST rate of 18%.
Desktop Monitors (More Than 32 Inches): When it comes to larger desktop monitors, those with a screen size exceeding 32 inches, the GST rate is slightly higher at 28%. So, if you’re thinking of getting a big, high-resolution display, keep this rate in mind.
Hard Drives: Whether you need an internal hard drive for your computer or an external one, the GST rate is consistent at 18% for both types. So, data storage solutions fall under this tax bracket.
External Hard Drives: If you require extra storage space and opt for an external hard drive, it also falls under the 18% GST rate.
Pen Drives: For those handy little pen drives that make transferring data a breeze, the GST rate is 18% as well.
Optical Drives: Optical drives, which are used for reading and writing CDs and DVDs, also have a GST rate of 18%.
These rates are applicable across India and are designed to provide a uniform tax structure for laptops and computer accessories. While the rates may vary for different product categories, they are relatively straightforward, making it easier for consumers to understand and plan their purchases.
It’s important to keep in mind that these rates can change over time due to government policies or updates to the tax structure. Therefore, it’s a good practice to stay updated with the latest GST rates, especially if you’re planning a significant purchase.
Understanding the GST rates on laptops and computer devices can help you make informed decisions when shopping for these essential pieces of technology. It ensures that you know what to expect in terms of taxes, allowing you to budget accordingly and make the right choices for your computing needs. So, whether you’re in the market for a new laptop, desktop, or any of the accessories mentioned, these GST rates provide clarity on the taxation aspect of your purchase.
To figure out the GST rate for goods, you’ll need to start by identifying the HSN (Harmonized System of Nomenclature) code, as all GST rates for goods are associated with these codes. Once you’ve got the HSN code, determining the GST rate becomes straightforward.
HSN Code for Computers & Laptops
The four-digit HSN code for computers is 8471, and the GST rate for HSN Code 8471 is 18%.
HSN Code for Personal Computers, Laptops, and Micro-computers: These items fall under Chapter 84 of the HSN code, specifically under the heading “Automatic Data Processing Machines and Units.”
According to this HSN chapter, an “automatic data processing machine” is any equipment capable of:
- Storing the processing program or programs along with at least the data immediately needed for program execution.
- Being programmable as per the user’s requirements.
- Performing arithmetic computations specified by the user.
- Executing processing programs without human intervention, making logical decisions during the processing run.
Moreover, these machines don’t have to be a single unit; they can be a system consisting of multiple separate units. Any unit that connects to a data processing machine meeting certain conditions would also be classified under HSN 8471:
- It’s primarily used in an automatic data processing system.
- It can connect to the central processing unit directly or through other units.
- It can accept or deliver data in a form (codes or signals) usable by the system.
This means that peripherals like keyboards, mice, and USB storage devices can also be classified under HSN code 8471.
HSN Code for Computers, Printers, Keyboards, and Storage Devices:
- The four-digit HSN code for computers, laptops, desktop PCs, and other personal computers is 8471.
- The four-digit HSN code for printers, keyboards, and USB storage devices is 8471.
- The six-digit HSN code for printers is 847160.
- The six-digit HSN code for keyboards, mice, and other input devices is 847160.
- The six-digit HSN code for USB drives, hard disks, and other storage devices is 847170.
GST on Computers and Related Products: Here’s the full 8-digit HSN code and GST rates for computers, printers, keyboards, storage devices, and other computer products in HSN chapter 84:
- 8471: Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, not elsewhere specified or included.
847130: Portable digital automatic data processing machines weighing not more than 10 kg. Consisting of at least a central processing unit, a keyboard, and a display:
- 84713010: Personal computer.
- 84713090: Other.
847141: Other automatic data processing machines, comprising in the same housing at least a central processing unit and an input and output unit, whether or not combined:
- 84714110: Microcomputer.
- 84714120: Large or mainframe computer.
- 84714190: Other.
- 84714900: Presented in the form of systems.
- 84715000: Processing units other than those of sub-headings 847141 or 847149, whether or not containing in the same housing one or two of the following types of unit: storage units, input units, output units.
847160: Input or output units, whether or not containing storage units in the same housing:
- 84716010: Combined input or output units.
- 84716024: Graphic printer.
- 84716025: Plotter.
- 84716029: Other.
- 84716040: Keyboard.
- 84716050: Scanners.
- 84716060: Mouse.
- 84716090: Other.
847170: Storage units:
- 84717010: Floppy disc drives.
- 84717020: Hard disc drives.
- 84717030: Removable or exchangeable disc drives.
- 84717040: Magnetic tape drives.
- 84717050: Cartridge tape drive.
- 84717060: CD-ROM drive.
- 84717070: Digital video disc drive.
- 84717090: Other.
- 84718000: Other units of automatic data processing machines.
- 84719000: Other.
Understanding these HSN codes and GST rates is essential for correctly assessing the GST on computers and computer-related products. It ensures you have a clear picture of the taxation aspect when buying or selling these items. Please note that these rates can change, so staying updated with the latest GST rates is a good practice, especially for significant purchases.
