The consumer appliances industry has made representations to the Goods and Services Tax (GST) Council several times to bring down the GST rates on these goods from the current 28% slab but with no respite.
And now as the sector sees muted demand in this financial year, the prices for consumer appliances such as refrigerators, air conditioners, washing machines and televisions are likely to be increased by 10-15% from July. A senior industry official said, "We had been holding on to our prices. However, sales have been muted in this financial year and hence the industry as a whole will be increasing the prices from July".
All major companies in the space including Godrej, IFB, LG, Samsung and Sony will no longer absorb a higher tax rate and production cost that over the last year has increased by 20-25% and instead will pass it to consumers. The demand for refrigerators and ACs generally increases in between March and May but this year it has remained subdued with single-digit growth. Hence companies in the space are bound to revise prices higher.
The industry post the roll out of GST from July 1, 2017 recorded single-digit growth in sales which otherwise rallied to as much as 30% in May and June 2017 in the anticipation of a higher GST tax rate on these products.