Viral GST Hack on iPhone: Save ₹36,000? Here's the Truth

If you're active on social media, you've probably come across all sorts of "money-saving hacks" — and one recent trend claims you can save ₹36,000 in GST by purchasing a ₹2 lakh iPhone and claiming Input Tax Credit (ITC). Sounds tempting, right?

But is it really that simple? Let’s break it down.

🚫 ITC Is Not a Discount — It’s a Tax Credit!

First, you need to understand that ITC is not a direct discount. It’s a credit that offsets your GST liability — and only GST-registered businesses can claim it. If you’re just an individual buyer and not running a business, this “hack” does not apply to you.

Even if you're GST-registered, you still can’t claim ITC automatically. There are specific conditions.

📋 Conditions to Claim ITC on a Gadget

Business Use Only:
You must use the iPhone exclusively for business purposes — making calls, sending work emails, client meetings, etc.

Personal Use Disqualifies You:
If you're watching Netflix or scrolling Instagram, the device is considered partially personal, and only proportional ITC can be claimed.

Proof Required:
Tax officers may demand usage proof — if not satisfied, your ITC claim can be rejected, and you’ll owe tax, interest, and penalties.

📜 The Fine Print of GST ITC on Gadgets

Under GST rules, gadgets like phones or laptops are treated as long-term capital assets. But if you sell the device within 5 years, you have to reverse some of the ITC you claimed.

📊 iPhone ITC Hack – Real-Life Breakdown

Let’s say:

• You buy an iPhone worth ₹2,00,000

• GST paid: ₹36,000 (18%)

• You claim ₹36,000 as ITC

Now, 3 years later, you decide to upgrade and sell your iPhone.
Since 2 years of the 5-year threshold remain, you must return ITC for those 2 years:

Calculation:

• 5% per quarter × 8 quarters = 40% reversal

• 40% of ₹36,000 = ₹14,400

So, you’ll need to repay ₹14,400 as reversed ITC.

🔁 But What If You Sell the Phone?

Let’s say you sell the iPhone for ₹1,00,000 and charge 18% GST (₹18,000).
In this case, you must return the higher of:

• Reversed ITC: ₹14,400

• GST on sale: ₹18,000

✅ So, you’ll need to pay ₹18,000 to the government.

⚠️ Final Verdict: Think Before You Try This Hack

✅ This GST trick works only for businesses,
❌ Not for personal use.
⚖️ Even businesses must handle it carefully, with proof, proper usage, and reverse ITC if rules are broken.

💡 Bottom Line:

“Saving ₹36,000 on an iPhone via GST ITC isn’t a free lunch. It’s only for compliant businesses, with strings attached.”