Cheaper Home Appliances Next On The Agenda Of GST Council

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After the rates have been rationalized for some 200 items which mainly were of mass consumption, GST rate cuts for the consumer durables which currently are taxed at the highest slab of 28% is in the offing. The rates for home appliances such as washing machines, ACs is considering that they are luxury items.

 Cheaper Home Appliances Next On The Agenda Of GST Council

CEAMA, the apex body has made representation to bring down the rate on 4 items namely TVs, refrigerator, washing machine and ACs to 18%. And it is highly expected that rate reduction on washing machine and refrigerators is next in the list of GST Council meet in January-February this year.

Eric Braganza, president, Haier India, said a GST rate cut even in two categories would be a welcome move. "Even if the government decides on two durable categories, it would be a big leap forward," he said.

While the penetration of TVs is high, washing machines and refrigerators are classified as necessities and AC can still be categorized under luxury items and be still be taxed under 28% category.

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"The GST Council has time till early next year to decide on its next course of action and I am sure they will consider bringing down the tax rate, though air conditioners may not be part of this list," B Thiagarajan, joint managing director, Blue Star, said.

"There is a feeling in government quarters that ACs are luxury items and can therefore continue to be taxed at 28 per cent, while washing machines and refrigerators are a necessity," he said. Close to two-thirds (or 67 per cent) of Indian households own TV sets, implying its penetration is high. Washing machines, refrigerators and ACs, on the other hand, have lower penetration, estimated at 12 per cent, 23 per cent and 5 per cent, respectively, according to data sourced from the industry.

Eric Braganza, president, Haier India, said a GST rate cut even in two categories would be a welcome move. "Even if the government decides on two durable categories, it would be a big leap forward," he said.

Story first published: Friday, November 24, 2017, 13:09 [IST]
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