From ACs to TVs, GST bonanza likely to boost demand for premium durables ahead of festive season

This festive season in India is nothing short of a bonanza — thanks to the GST Council's rejig and the anticipated massive rate cuts for premium products across several durable categories.

From premium air conditioners to larger television screens, the Indian consumer is set to be surprised by price deductions that could help them save thousands of rupees.

According to the initial estimates by industry analysts reported by ToI, air conditioner prices are set to fall by about 8% after companies pass on the benefit of the GST rate reduction from 28% to 18%. So, the price of a popular 1.5-tonne, 5-star rated split AC from LG is expected to decline by ₹4,000 from its current level of ₹44,000. Similarly, a 3-star Voltas model is likely to be cheaper by ₹3,000, compared to its present price of ₹34,000.


GST on television screens above 32 inches has been revised downwards, in a move that the industry hopes would help drive a shift towards larger TV screens in Indian homes.

For instance, a 65-inch Sony Bravia television, currently priced at ₹1.4 lakh, is expected to become cheaper by around ₹11,000. In the dishwasher segment, a premium BSH Home Appliances model may see its price reduced by ₹8,000 from the current ₹1.04 lakh.

Premiumisation will be a logical outcome, said Manish Sharma, chairman of Panasonic Life Solutions India and South Asia.

Calling the reform a long-awaited decision on the government's part, Sharma said that it would help increase demand for premium durables.

"This had been due for a while. It has come at the right time. Finally, there will be something on the demand side which will be significant," Sharma said.

Other industry players believe the move will set in motion a chain of events that helps them compete globally, even as domestic demand surges.

"This decision will propel the domestic market which also helps us compete globally more effectively as we gain in cost competitiveness due to a large manufacturing scale. So, it becomes a twin benefit, especially for contract manufacturers," said Sunil Vachani, chairman of contract manufacturing major Dixon.

Saif Khan, MD and CEO, BSH Home Appliances told ToI that the GST easing would bring much-needed optimism for the industry, while providing Indians an opportunity to choose from a vast variety of premium products, to upgrade their homes.

"With the festive season near, this move is poised to provide a much-needed boost to the industry, as more consumers seek to upgrade their homes with products that offer convenience, superior hygiene, and sustainability. 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% in the next two years," he said.

(With inputs from ToI)