Under the government's proposed GST reforms, the GST on air conditioners and TVs larger than 32 inches could be reduced from 28% to 18%. This is expected to reduce the price of air conditioners by ₹1,500 to ₹2,500, depending on the model. The move is expected to boost sales and increase consumer accessibility.
New Delhi: Following Prime Minister Modi's announcement, the government has proposed reducing the GST on air conditioners and TVs larger than 32 inches from 28% to 18%. This will provide consumers with price relief of ₹1,500 to ₹2,500. Experts say this move will help boost sales of domestic appliances and demand during the festive season. Once implemented, AC accessibility will increase for the common man, and demand for premium models will also increase.
GST Reform to Provide Benefits
The GST reform by the government plans to reduce the tax rate on TV screens larger than 32 inches, in addition to ACs, from 28 percent to 18 percent. This will increase the demand for domestic appliances and give companies an opportunity to increase sales during the upcoming festivals. Domestic appliance companies have described this change as a positive step.
Helpful in Increasing AC Accessibility
Blue Star MD B. Thiagarajan said that this is a great step and urged the government to implement it soon. He stated that customers will now not buy air conditioners in August, but will wait until September or October. Regarding the price benefit to customers, he said that it could be around 10 percent.
Panasonic Life Solutions India Chairman Manish Sharma said that the reduction in GST will directly reduce prices in the market by six to seven percent. Accordingly, a decrease of ₹1,500 to ₹2,500 in the price of ACs for the end user is possible.
Godrej Appliances Business Head Kamal Nandi said that AC penetration in India is still only 9 to 10 percent. Therefore, a reduction in GST will help make it more affordable and improve the standard of living for many Indians.
AC Demand to Increase
The fall in AC prices will not only benefit the general consumer but will also increase the demand for premium ACs. People will now buy energy-efficient models due to the cost benefit. This move will also help the industry increase sales during the festive season.
TV Market Will Also Benefit
TV maker Super Plastronics Private Limited CEO Avneet Singh Marwah said that this will increase consumerism in the domestic market and boost sales during festivals. He stated that sales of ACs and smart TVs larger than 32 inches could see a year-on-year increase of 20 percent.
Marwah suggested that the government should seriously consider bringing 32-inch smart TVs under the five percent tax bracket, as 38 percent of this segment comes from the unorganized sector.
Decline in Recent Months
However, the room air conditioning business was affected in the April-June quarter due to unseasonal rains and the early arrival of the monsoon. Companies like Voltas, Blue Star and Havells recorded a decline of 13 to 34 percent in their segment revenue during this period. Due to this, there was short-term pressure on the revenue and profits of the companies.
