GST 2.0: Unchanged budgets with lower prices spur demand for pricier TVs, cars and apparel

Price drops on account of the GST overhaul have given a fresh spark to the premiumisation trend in consumer spending, leading companies said.

Sales of large-screen televisions (55–65 inches), five star-rated air-conditioners, and apparel and footwear in the ₹1,000-2,500 range have seen accelerated growth in the last two days during online sales, a theme that’s likely to be echoed at physical stores as well. This is reflected in cars as well, with higher variants being most in demand. By contrast, entry-level models have remained flat or just posted marginal gains.

Even online, there is a marked trend as analysts see a 32-35% uptick in sale of certain items highly affected by the new tax regime. Haier India president Satish NS said online sales jumped 30% year-on-year in the past two days. “Consumers are upgrading with the price benefit,” he said.

Higher Specs

“TVs of 55–65 inches and higher-rated ACs now account for 70% of sales, up from 50% last year. We expect offline sales to mirror this trend from the weekend,” said Haier’s Satish NS.

GST rate cuts kicked in on Monday, coinciding with Navratri sales. Ecommerce platforms Amazon, Flipkart and JioMart are hosting their biggest annual sales, while offline retailers expect momentum to build from Dussehra.

Avneet Singh Marwah, chief executive of Super Plastronics, which sells Kodak, Thomson and Blaupunkt brands, said price reductions of ₹4,000-6,000 in premium TVs, coupled with bank offers and exchange schemes, have spurred sales. “The 32-inch entry-level TV, once the belly of the market, has declined 10-12% this Navratri compared to last year,” he said.

Premium 55-65-inch TVs now contribute 70% of sales, versus 50% a year ago.

Dealers of Maruti Suzuki India, Tata Motors, Mahindra & Mahindra and MG Motor India said the price reductions are almost equivalent to the premium for cars with extra frills. This, in turn, is nudging buyers to opt for more expensive variants.

“From yesterday’s bookings, it is evident the premiumisation trend will gain further traction,” said a Maruti Suzuki dealer in south Mumbai.

On the first day of Navratri, the dealership saw bookings upgraded, for instance, to Brezza ZXI from the VXI variant. As part of the GST reset, the price of the Brezza VXI (mid-trim variant) was reduced by ₹49,100 to ₹9,25,900 (ex-showroom, Mumbai) while the ZXI fell ₹86,100 to ₹10,39,900, prompting buyers to stretch their budgets and opt for the model with better specs.

Mahindra showrooms are also seeing buyers upgrade. “We have seen quite a few XUV700 buyers upgrade to AX7 from AX5,” said a dealer.

Clearly, with the GST moderation, the higher variants are becoming more affordable, said Ravi Bhatia, president and managing director at consultancy Jato Dynamics. “This is set to further reinforce the premiumisation trend in the market.”

Demand for most consumer goods, including electronics and cars, has been weak this calendar year, with most categories either reporting flat sales or a decline. Since August 16, sales dipped to a decade low as consumers postponed purchases to avail of the GST benefits that kicked in September 22. Car sales in India fell 7.3% year-on-year to nearly 330,000 units in August 2025.

With festive cheer amplified by GST cuts and offers, there’s a clear shift in preference, said Amit Kamat, chief commercial officer at Tata Motors. “New buyers are choosing value-driven options like the Tiago and CNG models, while others are upgrading to higher trims of Nexon and Punch, or moving to premium SUVs like Harrier and Safari,” he said. “This reflects rising demand for richer features, comfort and lifestyle-driven vehicles.”

Auto prices have dropped 6.25–10% owing to the GST revamp, with the sub-4-metre cars among those at the maximum end of that range. For TVs of 32 inches and above, ACs and dishwashers, GST has come down to 18%, from 28%. For apparel and footwear priced up to ₹2,500, GST is at the lowest slab of 5%. Before the cut, GST on apparel and footwear priced up to ₹1,000 was 5% and 12% above that.

Value fashion chain V-Mart Retail managing director Lalit Agarwal said the response has been robust, especially for products priced above ₹1,000 as the GST price discount there is more. “We would increase our product portfolio in the ₹1,000-plus price segment,” he said.