GST Rate Cut Makes ACs, TVs, and Washing Machines More Affordable This Festive Season

GST Rate Cut Makes ACs, TVs, and Washing Machines More Affordable This Festive Season

The Goods and Services Tax (GST) Council has announced a significant tax reform that will benefit consumers planning to purchase household appliances this festival season. In a major decision taken on September 3, 2025, the GST rates on several key consumer durables, including air conditioners (ACs), large-screen televisions, and washing machines have been reduced, making these products cheaper and more accessible to the average buyer.

Simplified GST Structure

The GST Council has streamlined the previous multiple tax slabs by scrapping the 12 percent and 28 percent brackets, leaving only two main slabs at 5 percent and 18 percent. Under this restructuring, products like air conditioners and TVs that were previously taxed at 28 percent will now attract 18 percent GST. Similarly, other appliances previously falling under 12 percent GST have been moved to either 5 percent or 18 percent, depending on their classification.

Impact on Prices and Consumer Demand

Industry experts predict that these tax cuts will translate into direct price reductions for consumers. For instance, air conditioners could be cheaper by approximately ₹1,500 to ₹2,500 per unit depending on the model. This price cut is expected to boost demand, particularly for premium and energy-efficient appliances, as these become more affordable to a broader segment of the population.

Company leaders and industry veterans have welcomed this reform. Blue Star’s Managing Director called it a “great move” that should be quickly implemented to help customers. Similarly, representatives from Panasonic and Godrej Appliances see the potential for increased market penetration of air conditioners, which currently stands at around 9-10 percent penetration in India.

A Timely Boost for Appliance Makers

The tax cut arrives when appliance manufacturers were facing a challenging quarter, with early monsoon rains affecting sales of cooling products. Companies like Voltas, Blue Star, and Havells reported significant revenue declines in their air-conditioning divisions over the June quarter. This GST reduction is seen as timely relief that could invigorate sales ahead of the busy festive shopping period.

Broader Implications

Finance Minister Nirmala Sitharaman highlighted that these GST reforms focus on easing the tax burden on everyday items essential for the common man. The simplification to a two-slab GST structure not only makes the taxation system easier to understand but also promotes greater consumption of consumer goods.

The reduced GST rates will take effect from September 22, aligning well with the start of the major festival season. As consumers prepare to shop for appliances and electronics, the price relief is expected to provide an additional incentive to buy, ultimately benefiting both customers and businesses.

This GST rate cut is a welcomed development for Indian consumers and the appliance industry alike, promising more affordable prices and a boost in demand just in time for the upcoming festive season