Air conditioner
The government’s proposal to reduce the Goods and Services Tax (GST) on the Air Conditioner (AC) from the current 28 percent to 18 percent is expected to sell good sale during the upcoming festivals. This will reduce the prices of air conditioner (AC) from Rs 1,500 to Rs 2,500 on the basis of various models. The price is going to be cut by the government recently after the income tax cut in income tax and the Reserve Bank of India amended the repo rate. Now this step will not only increase the reach of people to AC, but will also increase the demand for premium AC where people will buy energy-skilled models due to cost profit. Apart from this, this will also help in reducing the GST slab from the current 28 percent to 18 percent on the TV screen of more than 32 inches.
Sales will increase after October
Blue Star MD B. Tyagarajan, describing it as a great step, urged the government to implement these changes soon as people are now waiting for the decision to come into force before the purchase of Room Air Conditioner (RAAC). Tyagarajan said that no one will buy RAC (Room AC) in August, waiting till September or October 1. What can you do in the meantime? Dealers will not buy and customers will not buy. When asked about the price benefit to customers, he said that it will be about 10 percent as it is imposed on GST and price.
AC will be cheaper by Rs 2500
Manish Sharma, chairman of Panasonic Life Solutions India, said that the industry expects about 12 percent GST on energy efficient products and 18 percent GST will be charged on the rest of the products. He said that however, in a situation when GST is reduced from 28 to 18 percent on AC and other uplines, prices in the market will directly decrease by six to seven percent as the GST is usually imposed on the GST base value. Therefore it is unprecedented. Sharma said that this will reduce the price of AC from 1,500 to 2,500 rupees for the end user on the basis of model.
AC demand will increase
Godrej Appliances also hoped to get important help in promoting consumption and increasing the demand for applies. Kamal Nandi, business head of Godrej Enterprises Group, said that AC access in India is still at 9 to 10 percent low. Therefore, reducing GST on AC from 28 percent to 18 percent can help make it more economical and improve the lifestyle of many Indians.
TV market will also get help
Avneet Singh Marwah, CEO of Super Plastronics Private Limited (SPPL), a TV maker company with many global brand licenses, said that this will increase consumerism in the domestic market and increase sales in festivals. He said that a 20 percent increase can be registered in the brand on an annual basis. This is a great comeback for AC and 32 -inch smart TVs, both were in the scope of 28 percent tax. He suggested that the government should seriously consider bringing a 32 -inch smart TV within 5 percent, which will be a big change as 38 percent in this section comes from the unorganized sector.
Sales fell from better monsoon
In the April-June quarter of unseasonal rains and the monsoon time, the revenue of the listed companies listed in the Room-Air Conditioning (RAC) business has been affected by 34 percent. Listed companies such as Voltas, Blue Star and Havels have fallen by 13 per cent to 34 per cent in their section revenue in the RAC business in the April-June quarter, making short-term pressure on their revenue and profits.