Prime Minister Narendra Modi’s administration is advancing a major overhaul of the GST system—set to become the most extensive reform in nearly a decade—slashing consumption taxes on around 175 products, including air conditioners and televisions. These durable goods are expected to see GST fall from 28% down to 18%, bringing significant price relief as Diwali approaches.
This initiative is a key aspect of GST 2.0, intended to simplify tax slabs while boosting domestic demand, manufacturing competitiveness, and festive-season consumption. Major electronics brands like Samsung, LG, Sony, and Indian appliances makers, particularly Blue Star, are expected to benefit.
Impacts and Industry Response
- Consumer Savings
Retail prices for ACs and large-screen TVs could fall by 7–10%, translating into savings of ₹1,500–₹2,500 per unit, depending on the model - Boost to Sales & Penetration
Blue Star anticipates a 20% increase in AC sales over the fiscal year, attributing growth to the expected tax cut. Gail Sales are also projected to improve across TV segments. - Industry Advocacy
The India Cellular & Electronics Association (ICEA) has long argued that ACs and TVs are essential goods, not luxury items, and should not be taxed at the highest GST slab. Their demand for a GST reduction to 18% aims to promote affordability, curb gray market transactions, and support domestic electronics manufacturing.
Context and Timeline
- Prime Minister Modi announced the intent to rationalize GST by Diwali 2025, aiming to ease economic pressures and simplify the tax structure.Reuters
- The GST Council—led by Finance Minister Nirmala Sitharaman—is set to deliberate and finalize the list of items eligible for tax cuts during its scheduled meetings on September 3–4.
Why It Matters
| Key Factor | Insight |
|---|---|
| Festive Appeal | Timing the tax cut before Diwali is expected to drive strong consumer interest in home appliances. |
| Affordability & Demand | Lower GST rates will make premium appliances more accessible and boost sales volumes. |
| Economic Stimulus | The broader tax reform supports domestic manufacturing and encourages consumer spending amid global trade challenges. |
