GST on iPad: How Goods and Services Tax Applies to Apple Products

Apple is one of the most popular technological companies across the world, holding a significant market presence across the Indian consumer electronics industry. The product lineup of Apple encompasses iPhone, iPad, Television, MacBook, Watch and different software. Despite the expensive pricing, Apple's product offerings, such as the iPhone and iPad, are highly in demand in India. In the financial year 2024, the net sales value of Apple’s physical goods within the Indian market was around 4.65 billion USD. This showcases the extensive market demand for Apple products within the Indian market, which requires a proper GST system to streamline the sales operations. However, the consumer always worries about the goods and services tax (GST) associated with Apple’s products, as it increases the product cost substantially. This article focuses on the applicable GST rates and import duties across various Apple products.

What is Goods and Services Tax (GST)

Goods and Services Tax (GST) is known as the sole indirect tax for the whole nation, which was introduced with the vision to eliminate different indirect taxes within the Indian market. In India, every business is registered under this tax, which monitors the sales, purchases and input tax credits throughout any business operations. For a detailed guide on GST, follow the SWIPE blog on “GST Filing: Returns, Types & Due Dates”. Before the introduction of the GST system, iPad and iPhone were subject to taxation by the state as well as the central government in the form of value-added tax, customs duty and excise. With the introduction of GST, Apple products like iPhones require paying customs duty upon their import to India. The major reason why Apple products are costly in India is the added GST and customs tax upon their import from foreign nations.

GST Rate on iPad in India

The current GST rule indicates that Apple products, including iPad and iPhone, are in the category of data processing and portable automatic machines. The Central government of India has imposed a GST rate of 18% on these products; hence, the GST rate on iPad in India is 18% of the product value. GST rates on iPad and iPhone fall under the HSN code 8517, which has simplified the taxation process but increases the price of Apple products for consumers in India.

For example, if an iPad or iPhone is purchased from the dealer within any Indian state or Union territory, it will incur SGST and CGST rates of 9% each, which accounts for a total of 18% of the GST rate. Moreover, the same GST rate of 18% is applied to services and software offered by Apple, including iCloud storage, Apple Care and Apple Music. A large number of Apple product users do not realise that they are paying GST not only for their iPhones and iPads, but also for the online services they are using on the devices.

Understand the GST application on iPad with an example

Step	Components	Detail	Amount (₹)	Calculation
1	Fixed Import Price	Price given to the distributor before tax and customs	80,000	80,000
2	Custom Duty	India applies a 20% customs Duty on iPad	18,000	"80,000 + 16000 =
96,000"
3	Margin for Distributor	10% Profit margin kept by the distributor before sending the product to retailers	9,800	96000 + 9600
4	Total before GST	Price before the goods and services tax implication	1,05,600	1,05,600
5	GST	The Indian government imposed a goods and services tax by Indian Government on iPads.	19,008	1,24,608

As you can see in the above table, even the basic import price for the Apple products was at 80,000 INR, the added customs duty and distributor margin increased the price substantially pre-GST. With the imposition of 18% GST on iPad in India, the final cost of the product for the consumer is around 1,24,608 INR, and GST alone adds 19,008 INR to the final product price. Taxation and margin added within the Indian distribution system increased the base price of Apple products like iPhones and iPads, up to 50% across India. Therefore, due to this existing structure, high-end imported consumer electronic products are expensive in India as compared to European countries and the USA.

Input Tax Credits (ITC) on iPhones and iPads

Input Tax Credit (ITC) is an essential GST framework that deals with incurred expenses throughout the input of business activities. When organisations use Apple products like iPhones, iPads or MacBooks for official work, they are eligible to claim back the GST paid during the product purchase through ITC. However, there are a few criteria that need to be met before claiming the Apple products GST:

The product is solely used for business purposes, not personal needs.

The seller should be a registered business under GST.

The purchaser must hold the GST invoice from the seller with the business GST number.

Timely filing of GST returns and complete payment of due taxes.

Note that the purchase of Apple products like the iPhone or iPad falls under the CGST Act under capital goods because it is expected to be used for business purposes. Furthermore, if the purchased product's GST portion price is being capitalised, then no claiming of ITC can be done by the consumer. However, the consumer is eligible to claim the depreciation on the final value of the purchased product. ‍

Conclusion

Based on this article, it can be articulated that GST on iPads, iPhones and other Apple products is 18%, which is imposed after the customs and distributor margin price. The presence of the current structure increases the base import price of iPads and iPhones, up to 50% for consumers in the Indian market. Thus, a wise decision to control the tax imposed price for Apple can be local manufacturing to negate the customs duty charges.

Want to save the GST cost on the purchase of your Apple products? Get a detailed guide on ITC filing for your business with the help of SWIPE.