ACs, TVs, washing machines to get cheaper as govt slashes GST rates

Buying a new AC or television this festive season may no longer pinch the pocket as much. The GST Council has announced a sweeping rationalisation of tax slabs, bringing a set of consumer durables under a lower rate.

In its September 3, 2025, meeting, the Council scrapped the 12% and 28% slabs, retaining only 5% and 18%. That means products like air conditioners, large-screen TVs, refrigerators and washing machines, which were taxed at the steepest 28%, will now shift to 18%. Items earlier under the 12% slab will also migrate to 5% or 18%, depending on category.

A festive-season booster

For households, this translates into immediate savings. According to a PTI report, an air-conditioner could now cost Rs 1,500 to Rs 2,500 less, depending on the model. Industry executives believe the cut will not just drive volumes but also push buyers toward premium, energy-efficient models.

Also Read: GST Council slashes tax slabs to two to spur consumption; announces key measures for middle class

Blue Star MD B Thiagarajan had called the proposal a “great move” which should be implemented quickly.

Panasonic Life Solutions India Chairman Manish Sharma had estimated a 6-7% reduction in effective prices, calling it “phenomenal.” Godrej Appliances’ business head Kamal Nandi said the cut could lift AC penetration,which is still at just 9-10% in India, and “improve the quality of life for many households.”

For television makers too, the shift is timely. Larger sets above 32 inches, which were taxed at 28%, will now attract 18%. “Brands could see 20% year-on-year growth,” PTI had quoted Avneet Singh Marwah, CEO of SPPL, which manufactures TVs under several global labels, as saying. He had said that cutting GST on 32-inch smart TVs to 5% would be a “game changer,” especially against the unorganised sector.

Relief after a weak quarter
The decision comes as a breather for appliance makers, who faced a tough June quarter. An early monsoon and unseasonal rains hit cooling product sales, with listed players like Voltas, Blue Star and Havells reporting revenue drops of up to 34% in their air-conditioning businesses.

The Larger GST Journey
The move marks the most significant rationalisation since GST was rolled out in July 2017 with four slabs-5%, 12%, 18% and 28%. With the new two-slab structure, policymakers say the tax will be simpler, more efficient, and better aligned with its original promise of affordability and wider consumption.

The timing is not accidental. Weeks ago, Prime Minister Narendra Modi had promised a “Diwali gift” in the form of GST reform during his Independence Day speech. The Council’s decision has now delivered on that pledge, setting the stage for a consumption-led boost just as the festive season begins.