written by Khatabook | August 7, 2021

GST on Laptops - Laptops & Computer Accessories GSTR Rates & HSN Code

In 2017, the country's tax regime was modified by the Good’s and Service Tax (GST), which replaced all indirect taxes like VAT, Entertainment Tax, Service Tax, and others. With the implementation of GST in 2017, tax filing has become a much straightforward process as the use of laptop computers grows across the country. During the changeover phase, from VAT to GST, the GST rate for computers was hiked. With an increase in the country's indirect tax revenue, businesses were disturbed, and arguments were made to cut the GST rate on computers in order to develop a better Digital India.

GST on laptops

The GST Council determines the GST rates, and the current GST rate on laptops is 18%. VAT was imposed on the laptops in the pre-GST era at a rate of 14-15% which was different for different states. This resulted in higher prices for consumers which have now reduced because of GST, making laptop purchases more affordable now. 

How is GST Rates Calculated?

The GST rate for products and services changes regularly, based on GST council members' recommendations and approval. The council evaluates and revises GST rates regularly in order to manage taxation and improve the process.

Because the GST tax collection is outpacing, the government is considering lowering the GST rates. GST rates are set taking into account the existing situation and the proposals of members of the General body meeting.

Impact of the GST on Laptops and computers

Laptops and PCs are now taxed at 18%, up from 14-15% before GST implementation. If you've been considering purchasing a laptop or desktop computer recently, be prepared to pay a little extra. Laptops were once extremely expensive, but as technology improved, they became more affordable. Since the implementation of GST, they have once again become more expensive.

However, with all the discounts offered by various laptop and computer manufacturing companies throughout the year, you may be able to save a little money and compensate for the GST charge.

GST effect on Laptops

The approximate pricing of laptops by various brands is listed here to assist you in understanding the 18% GST you will be paying.

 

Laptop’s description

 

Pre-GST laptop price

 

Post-GST laptop price

HCL 32inches Laptop

Rs.40,019

Rs.41,619 approximately

Dell Inspiron 5000

Rs.38,000

Rs.39,520 approximately

Sony VAIO

Rs.29,990

Rs. 31,189 approximately

Toshiba Satellite

Rs.70,000

Rs. 72,800 approximately

Acer Aspire

Rs. 36,099

Rs. 37,542 approximately

The current GST rate on laptops in India is 18%, and the same GST rates apply to desktop computers and their accessories. The following is a quick rundown of the GST rates that apply to laptops and several essential accessories.

 

Types of Equipment

 

GST Rate

Laptop

18%

Computer

18%

RAM (memory chips)

18%

Pen drive

18%

External Hard Drive

18%

Optical Drives

18%

Hard Drive

18%

LED/LCD desktop monitors larger than 32 inches

18%

LED/LCD desktop monitor less than 32 inches

28%

Also Read: How to track GST Payment status & GST Payment Failures

What is an HSN code and how does it work?

HSN code is an abbreviation for "Harmonised System of Nomenclature." This system has been implemented all over the globe for the standardised classification of goods.

The HSN code is a six-digit universal number that categorises over 5000 products and is accepted all across the world. The HSN category is frequently used for taxation purposes since it aids in determining the tax rate that applies to a certain product in a given country. It can also be used in compensation claim calculations, as well as in import and export calculations.

The HSN code is used to determine the total number of all items imported or traded inside a country.

Because all GST rates for commodities are related to the HSN code, the GST rate for goods is established by determining the HSN code. After determining the HSN code, calculating the GST rate is simple.

HSN Code for Laptops, Computers, and other accessories

Computers, laptops, and microcomputers are classed under the category "Automatic Data Processing Machines and Units" in Part 84 of the HSN. The HSN code for computers is 8471, and they are subject to an 18% GST charge.

Specific equipment qualifies as Chapter 84 of the HSN if it falls into one of the categories below, according to the HSN:

  1. Devices that can be customised and programmed to meet the needs of the user.
  2. Devices that can hold processing programmes and data in real-time which are critical for the program's execution.
  3. Perform the user's requested arithmetic calculations.
  4. Without human interaction, a device or equipment can perform and carry out logical modification operations.

On the other hand, these machines do not have to be a single unit, such as a laptop or a computer. An automatic data processing machine can also be a system made up of several distinct modules. If it is connected to another data processing equipment, it can be considered a data processing machine. Listed below are a few examples.

  • It's one of a kind or is mostly utilized in a computerised data processing system.
  • It can be connected directly to the mouse or several additional units.
  • It can accept and deliver data in the system's code and signal forms.
  • USB storage devices, CPUs, keyboards, drives, and mouses are included in the HSN code 8471.

HSN Code for Computers, laptops, Printers, Keyboards, and other Storage Devices

The 4 digit and 6-digit codes for the devices listed below.

  • 8471 - Computers, desktop PCs, laptops, and other forms of personal computers have a four-digit HSN code.
  • 8471 - USB storage devices, printers, and keyboards have a four-digit HSN code.
  • 847160 - The six-digit HSN code for printer
  • 847160- The keyboards, mouse, and other input devices, six digits HSN code.
  • 847170 – USB drives, storage devices, and hard disks six digits HSN code.

 

HSN Code

 

Storage Devices

8471

Computers, Laptops, desktop PCs, laptops 

8471

printers, USB storage devices, keyboards.

847160

HSN code for the printer

847160

Mouse, keyboard, other input and output devices

84716010

Units with linked input and output

84716025

A Plotter’s HSN code

84716029

Printer category

84716040

A keyboard's HSN code

84716050

A Scanner’s HSN code

847130

Portable digital automatic data processing machines above 10kgs

847130

Keyboard and Display

84713010

Personal computers HSN code

847141

Automatic data processing machines with at least one central processing input or output unit in the same enclosure, whether or not combined

84714110

A micro computers HSN code

84714110

A mainframe computers HSN code

84714190

Under automatic data processing machine’s HSN code

84714900

presented as a series of systems

84715000

Other processing units than those listed in subheadings 847141 and 847149

84716060

A mouse’s HSN code

84716090

Any other unit or devices HSN code

847170

Storage units HSN code

84717010

A floppy disk drives HSN code

84717020

A hard disk drives HSN code

84717030

HSN code for detachable or interchangeable hard discs

84717040

A magnetic tape HSN code

84717050

A cartridges tape drives HSN code

84717060

CD- ROM device’s HSN code

84717070

Digital video disk drives HSN code

84717090

Under storage unit’s HSN code

84718000

Other units/devices auto data processing machines

84719000

For other relevant HSN code

8471 60 24

Graphic printer’s HSN code

The HSN Code and Its Importance

While the HSN code's principal function is to classify items in a systematic manner, it is also used to collect information and solve problems that are often difficult to address. HSN is used in more than 200 countries around the world.

The following are the advantages of categorising products by HSN code.

  • Obtaining statistics on international trade
  • Creating a reasonable foundation for customs charges
  • Uniform classification

HSN is used to classify over 98% of world trade stock, every country has an HSN number for each product, and the number is nearly the same for practically all goods; this makes it easier to calculate the Goods & Service Tax using HSN numbers.

What to remember about the HSN code on GST bills?

While generating GST invoices, it's important to note that the HSN number must be prominently shown. Here's how the various HSN classifications, ranging from 2 to 8 numbers, are used in India:

  • Taxpayers having yearly revenue of up to Rs 1.5 Crore in the previous financial year are eligible for some relief from the government.
  • Taxpayers must mention only the first two digits of the HSN code with a turnover of Rs 1.5 crore to Rs 5 Crore.
  • Taxpayers having a revenue of more than Rs 5 crore must include the HSN code's five digits.

There is no need to publish a lengthy description for each GST-eligible good when you use HSN codes. This enables the tax office to automate GST returns, resulting in saving time and money.

Also Read: GST on Mobile Phones: Applicability, GST Rates and Impact Explained

Conclusion

The GST team's slogan was "one nation, one tax." The GST was a sensible idea because it was designed to make conducting business easier. Even though the cost of a laptop has increased, the GST has decreased the number of taxes and thus established a streamlined tax system that promotes ease of doing business. 

This article has tried to make the information regarding GST rates on computer parts and monitors easier. Adequate information regarding GST for laptops and GST rates on the computer has been made available. Through this, the GST effect on a laptop has also been presented in this article. 

We also hope that this post has helped you comprehend GSTR Rates and HSN Codes for Laptops and Computer Accessories.

FAQs

1. What is the GST for laptops?

Laptops are now subject to GST at a rate of 18%, making the overall price slightly higher than it was in the pre-GST era.

2. How can I avoid or save GST on PC and laptop purchases?

There is no way you may avoid paying GST on an invoice issued by a GST-registered business. You can't escape paying tax on whatever you buy if you're doing everything correctly and legally. If you are registered for GST and purchase something in the form of business, you may be able to claim an input tax credit. This allows you to save money in the form of a credit that you can use to pay off any taxes you may owe as a result of your business. If you're buying a laptop for a business that's GST registered, purchase it from a registered dealer, so you may claim the GST as an input and have it deducted from your tax liability.

3. Will computers be less expensive after the GST?

Many other taxes, such as service tax, excise, and value-added tax, have been replaced by GST. Prices will be higher because VAT was previously 14–15%, and now the GST has raised the tax to 18%, therefore the price of computers will also rise. A laptop that costs Rs 50,000 will cost roughly Rs 51,000 or Rs 51,500.

4. What is the GST tax?

The GST is a value-added tax applied on most goods and services sold for domestic consumption. Consumers pay the GST, but companies who sell the goods and services must repay it to the government.

5. Who pays the GST tax?

1. GST-registered individuals who make taxable supplies are liable to pay GST tax

2. GST-registered individuals must pay their taxes through the reverse charge procedure.

3. GST-registered individuals who are obligated to deduct tax (TDS)

4. E-commerce firms that are GST-registered and who make certain types of specified supplies.

GST must be paid by the authorised supplier of goods or services in general; GST is taxation in the event of "supply," hence every supplier who makes taxable supplies must register, except for small enterprises with a turnover of less than Rs.20,000.

6. What effect does GST have on laptops?

It is essential to consider whether the laptop is being purchased for personal or corporate use; you must pay GST in any scenario. If you don't have a GSTIN, you can still buy a laptop and pay the price plus GST; however, you can claim an input Tax Credit if you have a GSTIN and are purchasing a laptop for business use.

7. What is GSTIN?

Every taxpayer who has registered for GST is given a 15-digit code called a GSTIN.

Here's how to obtain your GSTIN number.

  1. Go to www.gst.gov.in to access the GST online site.
  2. Go to the 'Register Now' page..
  3. Fill out the Part A form with your name, email address, and phone number.
  4. Enter the OTP received on your mobile and email.
  5. After verification, you’ll get your Application Reference Number (ARN) via mobile or email.
  6. Now, fill out Part B form using ARN along with documents such as Photographs, Proof(s) of place of business, Constitution of taxpayer, Bank account details and Authorisation form
  7. Fill all information and submit the application using DSC or Aadhaar OTP.
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