TVs, ACs, dishwashers GST cut may brighten Diwali for consumer electronics

GST Council has reduced rates on TVs, ACs and dishwashers to 18% from 28% which may boost consumer demand ahead of Diwali

This Diwali, air conditioners, dishwashers and television sets could see sharper demand as the Goods and Services Tax (GST) Council has moved these items from the 28 per cent bracket to 18 per cent, effective September 22, just weeks before the festive season peaks in October.

 

The shift comes as part of a broader rate rationalisation that simplifies the earlier four-slab structure (5, 12, 18 and 28 per cent) into two slabs of 5 and 18 per cent, with a 40 per cent 'sin tax'. The timing has raised expectations of a boost to sales in the market, especially in consumer electronics. 

 

 

What has changed?

In consumer electronics, the following categories move from 28 per cent to 18 per cent:

1. Air conditioners
2. Dishwashers
3. Television sets, monitors, projectors, set-top boxes

Price impact on Acs, TVs under GST 2.0

Under Indian tax law, the maximum retail prices (MRPs) on consumer electronics must include GST. Therefore, this reduction, based on average prices, could translate to:

 

Air-conditioners: A 1-1.5 ton inverter model priced around ₹30,000 could see a ₹3,000-3,500 reduction.

 

Dishwashers: On a ₹50,000 unit, consumers may save nearly ₹5,000.

 

Televisions: A ₹30,000 set could become cheaper by around ₹3,000. 

"The reduction in GST rates for Air conditioners from 28 per cent to 18 per cent will increase affordability and significantly boost demand for the product in the country," said Jasbir Singh, chief executive officer and whole time director, Amber Enterprises. "This will also amplify demand in tier II and III cities where aspirations are growing with rising disposable income but sentimentally price-sensitive. This progressive reform signals the government's confidence in consumption-led growth which will create a positive multiplier effect - encouraging consumer spending, boosting retail confidence, and strengthening overall market sentiment. It also reflects the sentiment that consumer durables are no more luxury purchases but an essential lifestyle upgrade for a new and growing India."

 

 

Passing on the benefit, anti-profiteering

The GST law requires that any reduction in tax rates be passed on to consumers. As earlier reported by Business Standard, the government is also considering reintroducing anti-profiteering provisions for a limited period to ensure compliance after the launch of GST 2.0.

 

The National Anti-Profiteering Authority (NAA), set up in 2017 to monitor such cases, was dissolved in December 2022, with its functions transferred to the Competition Commission of India (CCI). However, by mid-2024, the CCI had told the GST Council that anti-profiteering was not part of its core mandate, leaving the responsibility with tax authorities.

 

This means consumers can expect to get direct benefits from the GST cuts. 

Festive demand outlook

The festive season in India typically begins from September and runs through November, peaking on Diwali, which is slated for October 20-21 this year. Historically, this has been the strongest quarter for the consumer durables industry. A 10 percentage point reduction in GST could therefore lift demand in urban markets, especially for big-ticket appliances, where price sensitivity is high.

 

The GST cuts also come at a time when manufacturers are facing margin pressures from input costs and currency volatility as trade relations evolve and supply-chain disruptions occur due to geopolitical shifts.