Later, on August 17, Prime Minister Narendra Modi added that the Centre has circulated the draft GST reforms among states and sought their cooperation to implement the proposal before Diwali.
ACs, to cost less by ₹1,500-2,500 next summer?
Electronic makers think so, they expect that the government will mark down electronics from the current 28 per cent GST bracket to the 18 per cent slab, thus allowing for reduction in costs by ₹1,500-2,500 depending on the AC models, PTI reported. The cost cuts take into account the proposed GST revisions and repo rate impact, it added.
Apart from ACs, your televisions could also come cheaper, when applying the same principle of lower GST slab. At present, TV screens over 32 inches are taxed at 28 per cent — this could come down to 18 per cent.
What do electronics companies say?
B Thiagarajan, MD of Blue Star feels the GST reforms are a “great move”, adding that the price benefit to the customer on the final pricing would be around 10 per cent, PTI reported.
Manish Sharma, Chairman of Panasonic Life Solutions India said it would be “phenomenal” if electronics and appliances are brought into the 18 per cent bracket, as “there will be a straight 6 to 7 per cent odd price reduction in the market” that will “result in reduction of ₹1,500 to ₹2,500”, depending on the cost of the models.
What will get cheaper due to GST reforms?
Among the sectors likely to see costs reduction due to the proposed GST reforms include everyday essentials such as groceries (food, fruits, vegetables), medicines, electronics (including ACs, TVs, fridges, washing machines), agricultural equipment, bicycles, insurance and education services.
In groceries, items such as condensed milk, dried fruits, frozen vegetables, sausages, pasta, jams, namkeens including bhujiya, tooth powder, feeding bottles, carpets, umbrellas, bicycles, utensils, furniture, pencils, handbags made of jute or cotton, and footwear under ₹1,000 are currently taxed at 12 per cent GST, but will be brought under the 5 per cent umbrella, allowing for cost reductions.
What are the proposed GST reforms?
As of August 18, the effective GST rate slabs in India are 5 per cent, 12 per cent, 18 per cent, and 28 per cent, on most goods and services, except commodities such as gold and silver. The reforms propose new tax slabs of:
- 5 per cent (collapsing the 12 per cent slab into it),
- 18 per cent (collapsing the 28 percent slab into it), and
- 40 per cent for select “sin” category goods such as tobacco and alcohol products.
Notably, since GST is a consumption-oriented tax, PTI reported most experts agreeing that it is the final consumers who will ultimately benefit from these reforms, as lower GST means lower final cost.
