Blue Star seeks CENVAT exemption for ACs in Budget

Demanding CENVAT exemption for 5-star and inverter ACs in the Union Budget, a top official of air-conditioner maker Blue Star today said such a move by the Union Finance Ministry will help people shift to eco-friendly ACs.
"It is in the interest of the government to exempt tax because with more people buying inverter and 5 star ACs, power requirement will go down and so will pollution," Blue Star Executive Director B Thiagarajan told reporters here.
He said cost of such ACs were high and if the volume went up, prices would go down by 30 to 50 per cent.

"The issue is with affordability. People should be able to buy them. Right now in India, only 10 per cent market is of inverters, while in China it is 75 per cent," the official said.
Another point he raised was of foreign brands competing with Indian companies.
"How will the domestic market grow? For 'Make in India' our products have to be cheaper, otherwise we will not be able to compete with China," Thiagarajan said.

The company estimates that the AC market would grow by 15 per cent in the coming fiscal and their own market share would increase to 12 per cent from 10.5 per cent.

For Blue Star, their 50 per cent of sales comes from tier three, four and five cities and towns.
"In northern India, our market share is 7.5 per cent. It is because it is a very price sensitive market, demand for windows ACs and weak distribution network. Now we are increasing our focus in the north," he said adding they want to be the number one player in the inverter segment in India.