Our Bureau
New Delhi
The Central Government is looking to make changes all across the board with a possibility of GST being reduced for several products. The government is looking to remove the existing 12% and 28% slabs of GST as part of their GST rationalisation scheme and will only be keeping in the 5% and 18% GST rates.
This GST rationalisation will be bearing bad news for the market which is expecting a very dull phase in the coming two or three months. Manufacturers of air-conditioners to televisions are all getting ready to face this drop in demand as they believe the consumers are going to wait for the GST cut that might be on the cards in the coming months.
It is also being reported as per many industry executives that if the revised tax rates were to be announced in October, around Diwali the market can see a huge hike in purchases all throughout the festive season. However, the industry is also worried that consumers will refrain from big-ticket purchases in anticipation of the coming GST cut. This will impact the demand during the peak sale periods such as Ganesh Chaturthi, Onam and Durga Puja festivals.
The proposed changes in the GST may impact ACs and TVs above 32 inches, putting them in the 18% GST bracket from their current 28%. Other appliances such as refrigerators, washing machines, small-screen TVs of 32-inches and below, microwave ovens as well as geysers, are already taxed at 18% right now.
Blue Star’s Managing Director B. Thiagarajan has stated that the consumers are looking to hold their purchase for now in anticipation of tax cuts. He stated that there is no clarity and they could only hope that the tax cuts bring a strong surge in festive seasons.
“Consumers who were planning to buy an AC this month or the next would hold back in wait for cheaper prices. We don’t know if there would be any additional cess or whether state governments are on board with the new rates. All eyes remain on how the government merges the GST slabs and when the revised rates take effect,” Thiagarajan said.
