Brighter Market for TVs, ACs: New GST Reforms to Spur Demand for Consumer Electronics This Festive Season

Diwali this year will witness sharper demand for consumer electronics like air conditioners, dishwashers and television sets as the Goods and Services Tax (GST) Council has moved these items from the 28 per cent bracket to 18 per cent, starting from September 22, just ahead of the peak festive season in October.

This 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 of the announcement has raised expectations in terms of boosting to sales in the market, especially in consumer electronics.

What’s Changed in Consumer Electronics?

In the segment of consumer electronics, these products will move from the existing 28 per cent to 18 per cent:

• Air conditioners

• Dishwashers

• Television sets, monitors, projectors, set-top boxes

What’s the impact on AC & TV Prices?

The Indian tax law states that the maximum retail prices (MRPs) on consumer electronics must include GST. Therefore, as per a Business Standard report, 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. 

According to Jasbir Singh, chief executive officer and whole time director at Amber Enterprises, "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."

He further said that this will further increase 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,” he added.

Demand Fuelled by Festive Season

This year, the festive season in India will typically start from September and run 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 rate 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 have been created mainly due to geopolitical shifts.