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New Delhi: Electric appliance makers are expecting a booming festive season, courtesy government's latest reform proposal to undertake changes in the GST slab. The proposed GST reforms are set to lower the final consumer prices of electric appliances like room air conditioners and smart TVs.
Under the new proposed slab, GST on air conditioners (AC) will drop from the current 28 percent to 18 percent, which is set to reduce the price from Rs 1500 to Rs 2000 depending on the AC model. Additionally, smart TVs above 32 inches are expected to come under the 5 percent GST slab.
Under the new proposed slab, GST on air conditioners (AC) will drop from the current 28 percent to 18 percent, which is set to reduce the price from Rs 1500 to Rs 2000 depending on the AC model.
Additionally, this step is set to increase the AC penetration in India while simultaneously boosting the AC premiumisation in India. Currently, due to cost cutting, people are preferring energy-efficient models in place of premium models, which attract higher GST as compared to energy-efficient ones.
"In a situation where GST on ACs and other appliances are reduced from 28 to 18 per cent, there will be a straight 6 to 7 per cent odd price reduction in the market, because normally GST is charged on the base price. So, this is phenomenal," Manish Sharma, Chairman, Panasonic Life Solutions India, was quoted by PTI a saying.
He further said this revolutionary step will result in a reduction of Rs 1,500 to Rs 2,500 depending on the end consumer prices of an AC model.
Terming it as a "great move," Blue Star Managing Director B. Thiagarajan has asked the government to implement the changes quickly as people have put their purchase of Room Air Conditioners on hold.
"Nobody will buy RAC (room ACs) now in August; they will wait till September or October 1. So, in between, what will happen in between? The dealers will not buy, and customers will not buy,” Thiagarajan said, as quoted by PTI.
Secondly, the GST reforms are set to bring down the prices of TVs above 32 inches. Presently, the said models attract 28 percent GST. The reforms are set to bring down GST to an 18 percent slab.
"Brand can witness 20 percent year-on-year (growth), this is a great comeback for AC and Smart TVs above 32 inches, both of which were under 28 percent tax lab," said Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd (SPPL), a TV manufacturing company, as quoted by PTI. He further said that this step is set to boost consumerism in the domestic market and to increase sales in the festivals.
However, he opined that the government must bring down 32-inch smart TVs under the 5 percent GST slab. If done so, this step will be a game changer, as 38 percent of sales in this segment are coming from the unorganised sector.
