Consumer goods firms want GST on ACs, large TVs cut to 18%


White goods makers want Goods & Services Tax  (GST) on air conditioners (ACs) and large televisions (above 32 inches) to be reduced to 18 percent from 28 percent in the first GST Council meeting of Modi 2.0. The white goods market in India is currently valued around Rs 60,000 crore.

The GST Council, headed by Finance Minister Nirmala Sitharaman, is likely to convene in June. Prior to that, the members will interact with stakeholders of different sectors to understand requirements of each industry.

As part of this process, each industry association will present a wish-list to the GST Council. Most demands pertain to reduction in the rate of taxation.

Gurmeet Singh, Chairman and MD, Johnson Controls-Hitachi Air Conditioning India, is hopeful of a reduction in rates once the GST Council meets under the new government.

“AC is a residential product, but has a penetration of 5-6 percent in India. Its ticket value is comparable to large- to medium-sized TVs, refrigerators or washing machines. It continues to be an aspirational product for Tier II and III towns. The GST reduction will help us,” he said.

If the GST rates reduce, prices of ACs will drop further. Till date, ACs were viewed as a luxury item and hence should be taxed at the highest slab of 28 percent.

Apart from ACs, there has been a consistent demand from the smart TV segment to pare down the GST rate to 18 percent.

Avneet Singh Marwah, CEO, Super Plastronics (the exclusive brand licensee for Kodak TVs and Thomson TVs in India), said that while the 32 inch and 40 inch television category is among the top sellers online, GST of 28 percent continues to be a dampener for the industry.

“28 percent GST for TVs is the highest rate charged anywhere in the world. We are hoping that this is reduced to 18 percent, which will boost volume and enable higher tax collection,” he added.

Former Finance Minister Arun Jaitley had earlier indicated that when the GST collections would go up significantly, this could open up room for rate cuts across products like high-end TVs and lifestyle products like ACs.

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