Comments by Mr. Kamal Nandi, Business Head & Executive Vice President, Godrej Appliances and President – CEAMA. on the GST rate revision announcement

We welcome the move by the government to reduce the GST rate on TVs (up to 32 inches) among other items, from 28 percent to 18 percent. This will further propel demand in this category

Evolving consumer lifestyles, rising temperatures and pollution levels make consumer durables, a must-have for every Indian home.

Unfortunately, Air Conditioners are still in the highest tax slab, at 28%. Lowering the tax slab would have made Air Conditioners more affordable and helped further in penetrating the market which, at the moment, is still low at 4%.

India has today one of the most stringent energy efficiency norms which have been continuously tightened. Compliance with the norms has been challenging for the industry in terms of R&D investments and manufacturing upgrades, causing a huge impact on the material cost for energy efficient Air Conditioners, which ultimately gets passed on to the end customer. The recent increase in basic customs duty from 10% to 20% for imports apart from currency and commodity impact, put further pressure on prices for Air Conditioners, dampening consumer sentiments in festive as well.

The revision in the GST rates would have helped offset the price pressure and spur demand for the Air Conditioners category which has seen de-growth this year.