Government Proposes GST Reduction on Air Conditioners and TVs to 18% Ahead of Diwali

Air Conditioners

INDIA: The Indian government, under Prime Minister Narendra Modi, is pushing ahead with a sweeping revamp of the Goods and Services Tax (GST) system, dubbed GST 2.0, which marks the most significant reform in nearly a decade. As part of this overhaul, consumption taxes on around 175 products, including air conditioners and televisions, are expected to be reduced, with GST on these durable goods likely to fall from 28% to 18%. This move, strategically timed ahead of the Diwali season, is designed to simplify the existing tax slabs while spurring domestic demand, strengthening manufacturing competitiveness, and stimulating festive-season consumption. For consumers, this could translate into a 7–10% reduction in retail prices, resulting in savings of ₹1,500–₹2,500 per (US$17 – US$28) unit depending on the model. The industry outlook is also positive, Blue Star, for instance, anticipates a 20% increase in AC sales in the current fiscal year, while TV manufacturers expect a broad sales boost across categories. Electronics majors like Samsung, LG, and Sony, alongside leading Indian appliance makers, are among the key beneficiaries. The India Cellular & Electronics Association (ICEA) has consistently advocated for such reforms, stressing that products like ACs and TVs should be classified as essential rather than luxury goods. According to the association, lowering GST to 18% will not only make these products more affordable for consumers but also curb gray market activity and give a strong push to domestic electronics manufacturing.

Source: The India Cellular & Electronics Association