Dixon Technologies, Amber Enterprises and other electronics manufacturing services (EMS) companies have welcomed the GST council’s decision to reduce the tax on televisions and air conditioners, calling it a landmark reform that will spur consumption as well as manufacturing.
On September 3, the goods and services council decided to overhaul the indirect tax regime by adopting two-slab structure of 5 percent and 18 percent, doing away with 12 and 28 percent brackets. To boost consumption, the council lowered GST on a range of goods, including lowering levy on TVs (32-inch and above) and ACs to 18 percent from 28 percent.
India’s growth story gets a boost
“This is a ground-breaking initiative in the GST reforms. A transformative step towards ease of doing business and strengthening India’s growth story. This will surely trigger growth in the sales of LED TVs and ACs and further push the Make in India agenda,” Dixon Technologies co-founder and executive chairman Sunil Vachani said.
His Amber Enterprises counterpart, Jasbir Singh, agrees. The reduction in GST rates, which kick in from September 22, for air conditioners will improve affordability and significantly boost demand, he said. “This will also amplify demand in Tier 2 and 3 cities where aspirations are growing with rising disposable income but sentimentally price-sensitive,” the Amber CEO said.
The move would 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 longer luxury purchases but an essential lifestyle upgrade for a new and growing India,” he said.
The reforms will not only benefit consumers but also provide a major fillip to India’s electronics manufacturing ecosystem by expanding the domestic market base, encouraging fresh investments, and enabling scale, industry executives said.
Panasonic Life Solutions India chairman Manish Sharma said the rationalisation of GST on AC and television sets will benefit consumers, as the festival season begins.
“This move, coupled with the recent revision in the income tax slab exempting annual earners up to Rs 12 lakhs, is expected to significantly boost disposable incomes and consumer sentiment,” Sharma said. The reforms create a strong momentum for the consumer durables sector, driving higher demand across urban and emerging markets.
'Dual win'
The ministry of electronics and information technology (MeitY) echoed this view, calling the GST cuts on air conditioners, dishwashers, and LCD/LED televisions a “dual win”— increasing affordability for consumers while bolstering domestic electronics manufacturing.
MeitY said lower rates will stimulate demand for ACs and large TVs, expand the market size for domestic producers and strengthen backward linkages across the value chain in critical components such as compressors, displays, and semiconductors.
The move is also expected to open opportunities for MSMEs in plastics, wiring, cooling systems, LED panels, and assembly services, while reducing India’s dependence on imports. The ministry added that the reduction in GST on dishwashers would further enhance ease of living for households, the ministry said.
The AC and TV GST cut fulfils a long-pending industry demand and will make appliances more affordable, spur demand, and drive consumption, critical factors for scaling India’s electronics manufacturing, said Pankaj Mohindroo, who is the chairman of the India Cellular and Electronics Association (ICEA).
ICEA, which represents companies such as Apple, Foxconn, Flex, Dixon, and leading handset brands in India, also called for more reforms. “We remain hopeful that the rationalisation of GST on smartphones and laptops — from the current 18 percent to 5 percent — will be considered in the future, given its potential to improve affordability and strengthen digital inclusion,” Mohindroo said.
The rate cut on TV will improve cost efficiencies, boost domestic value addition and allow manufacturers to pass on benefits to customers, Ankit Jain, CFO and executive director, Arham Technologies Ltd, said. This timely policy support, which comes ahead of the Diwali season, will drive growth, innovation and job creation in the electronics sector, he said.
Arham Technologies makes TV sets and consumer durables such as fans and coolers.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
