GST reduction to help AC makers gain ground, prices to go down by up to Rs 2,500
Moreover, this reduction in price, which has come after the government's recent Income tax cut and repo rate revision, will not only help in increasing penetration of ACs but also premiumisation, where people will buy energy-efficient models due to cost advantages.
Besides, this will also help to bring the GST slabs on TV screens above 32 inches from the current 28 per cent to 18 per cent.
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, 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 told PTI.
On being asked about the price benefit to the customer, he said, 'This will be around 10 per cent", as the GST is levied on the final pricing.
Panasonic Life Solutions India Chairman Manish Sharma said the industry was expecting around 12 per cent GST on energy-efficient products and rest in the 18 per cent bracket.
However, '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," he said.
This will result in reduction of Rs 1,500 to Rs 2,500 depending on the end consumer prices of an AC, depending on the models, he said.
Similarly, Godrej Appliances said the proposed reduction in tax slabs will significantly help to boost consumption and drive appliances demand.
'The AC penetration level in India is still low at 9 to 10 per cent. Therefore, GST reduction from 28 to 18 per cent on ACs can help to make it more affordable to the masses and improve the quality of life for many Indians," said Kamal Nandi, business head & EVP, Appliances Business at Godrej Enterprises Group.
According to Nandi, currently room ACs are taxed at 28 per cent, and other appliances such as refrigerators, washing machines, microwaves already have 18 per cent GST.
Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd (SPPL), a TV manufacturing company having licenses of several global brands, said this will increase consumerism in the domestic market and boost sales in the festive season.
'Brand can witness 20 per cent year-on-year (growth), this is a great comeback for AC and Smart TV above 32 inches, both of which were under 28 per cent tax lab," he said.
However, he also suggested that the government should seriously consider bringing 32 inches smart TV under 5 per cent, which will be a game changer as 38 per cent in this segment is coming from the unorganised sector.
Unseasonal rains, early arrival of monsoon have impacted up to 34 per cent of the segment revenue of listed entities in the June quarter, which operated in the room-air conditioning (RAC) business.
Listed players including Voltas, Blue Star and Havells, have reported a decline between 13 per cent to 34 per cent in their segment revenue, in the housing RAC business in the latest June quarter, creating a short-term pressure on their topline and margins also. PTI KRH DRR
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First Published:
August 18, 2025, 13:45 IST
News agency-feeds GST reduction to help AC makers gain ground, prices to go down by up to Rs 2,500
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