Higher abatement to bring down consumer durable prices

Air-conditioners, television, LCD and a host of other consumer durables received and unexpected bonanza from the finance ministry that could bring down their prices and push up demand.

The finance ministry has announced major rationalisation measure for the consumer durable industry by fixing a uniform rate of abatement or the value exempted from indirect taxes including excise and customs duty.

From now a uniform 65% per centage of value will be charged to excise duty, and customs levy in the case of imported goods. In many cases the amount charged was higher.

The government had raised the median excise duty this budget to 12%, impacting the consumer durables sectors.

"There was no rationale in having separate values in the home appliances segment as it led to unnecessary confusion," a finance ministry official told ET.

Though, the objective was to rationalise but it has benefitted a host of sectors that enjoyed a lower abatement.

Companies like Samsung, Videocon, LG, Voltas and Whirlpool will benefit from the move.