AC, TV makers cheer over 10% GST rate cuts; 7-8% price drop on the cards

New Delhi: Big screen televisions above 32 inches are expected to see a price drop of up to Rs 4,000 while room air-conditioners could become cheaper by 7-8 per cent following the GST rate cuts, consumer appliances makers said on Thursday, terming the latest tax reform as a "progressive step" that will meaningfully reshape consumer demand.

The GST Council's decision to reduce duty on TV screens above 32 inch in size and room air-conditioners from 28 per cent to 18 per cent will not only help in increasing sales but also lead to higher penetration and encourage local manufacturing, they said.

For room air-conditioner (RAC) makers, which had a bad season this year due to unseasonal rains and early arrivals of monsoon, the GST cut will provide a much needed boost in the festive season.

Leading air-conditioner maker Voltas said the tax rationalisation is a "progressive step" that will meaningfully reshape consumer demand, especially when the festive season approaches.

"This move is expected to encourage purchases across the country. Large appliances are high-involvement categories, and this reform will support broader access to energy-efficient solutions," Voltas Managing Director Mukundan Menon said.

According to him, this is not just a short-term boost for festive sales, but a catalyst for deeper market penetration.

Godrej Enterprises Group Business Head & EVP at Appliances Business Kamal Nandi said now room ACs are no longer a luxury and a drop in GST rates will help in increasing its affordability.

"ACs are estimated to be at around 10 per cent penetration levels (dishwashers are at negligible penetration). The drop in GST improves affordability for consumers and is expected to improve product penetration levels over time," he said.

Expressing similar views, Daikin Air-conditioning India Chairman and Managing Director Kanwaljeet Jawa said this GST rate cut on air conditioners will positively impact the industry and boost customer sentiment, especially for the upcoming festive season.

"This was much needed by our industry as we see our air-conditioning as a necessity for the growing middle-class aspirations. Daikin will continue to innovate and invest in India to manufacture world-class products," he said.

Grant Thornton Bharat Partner and Tax Controversy Management Leader Manoj Mishra said: "This cut is expected to lower effective prices by 7-8 per cent, making AC more affordable for first-time buyers."

Beyond boosting penetration, he said, "The rate reduction is likely to drive premiumisation, encouraging consumers to opt for energy-efficient and higher-end models due to cost advantages." 

The GST Council's decision to reduce duty on TVs of screen size above 32 inch from 28 per cent to 18 per cent could lead to a reduction in prices of above 65 inch screen size by around Rs 4,000 and 55 inch screen size -- a popular category -- by around Rs 2,500, industry players said.

Already, TVs with up to 32 inch screen size are taxed at 18 per cent.

Panasonic India Chairman Manish Sharma said the GST rate cut on big screen TVs will directly benefit consumers, especially as the festive season commences.

"With this reduction, products that were earlier seen as aspirational are now more accessible, allowing a larger section of households to upgrade to energy-efficient and connected appliances," he said.

This move, coupled with the recent revision in the income tax slab, is expected to "significantly boost" disposable incomes and consumer sentiment.

"Together, these reforms create a strong momentum for the consumer durables sector, driving higher demand across urban and emerging markets," said Sharma.

BSH Home Appliances, a leading player in the dishwasher segment, said the government's decision to reduce the GST rate on the category from 28 per cent to 18 per cent is a significant and timely step forward.

"As India's urban population continues to grow and consumers increasingly prioritise smarter, more efficient living solutions, this reduction will make premium, energy-efficient home appliances more accessible to a larger audience. With the festive season around the corner, this move is poised to provide a much-needed boost to the industry," said BSH Home Appliances CEO Saif Khan.

The dishwasher segment is on track to be the fastest-growing category within the home appliances market in India, with an anticipated growth rate of 30-35 per cent over the next two years, he added.

Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd (SPPL), a TV manufacturing company having licences of several global brands including Thomson, Kodak, Blaupunkt, said GST rate cut will boost sales in the festive season, accelerate penetration of smart devices in tier-2 and tier-3 cities and rural India.

"It will not only make technology more affordable for consumers but also drive digital inclusion across households. This progressive step will boost demand, encourage innovation, and support the growth of India's electronics industry," he said.

This reduction will not only benefit consumers but also strengthen the entire value chain of the smart TV ecosystem -- from manufacturers to retailers, Marwah noted.

Moreover, the TV industry, which has been witnessing a slow pace of growth, will get a much-needed boost, encouraging manufacturers to innovate further while strengthening the overall electronics ecosystem in India.

Haier Appliances India President N Satish said reduction in GST rate cut is timely and will significantly boost affordability and consumer sentiment.

"It not only simplifies compliance but also creates a conducive environment for industry growth and long-term investment," he said.