GST regime: Consumer appliances likely to become costlier

Updated - January 11, 2018 at 09:39 PM.

The industry said at least some of these appliances should be put in the 18 per cent tax slab, pointing out that they have now become a necessity and are no longer luxury items.

BL20_Home_appliances

Consumers will need to brace for a price hike of 3-4 per cent on consumer durable products, such as washing machines, air-conditioners, TVs, refrigerators, and ceiling fans, under the GST regime.

CM Singh, COO, Videocon, said with most of the consumer appliances placed under the 28 per cent tax slab, the tax incidence of consumer durable companies will go up and the industry is likely to pass this on to the consumers.

The consumer appliances industry was batting for at least some of these appliances to be put in the 18 per cent tax slab and had pointed out that these products have now become a necessity and are no longer luxury items.

However, the GST Council has put most of these products in the highest tax slab of 28 per cent.

Kamal Nandi, Business Head & EVP, Godrej Appliances, said, “In the past few months, changes in star labelling norms and a commodities price increase have led to an increase in costs for consumer durables.

“So, it will be difficult for companies to absorb this and they are likely to take a price increase of 3-4 per cent. This could impact demand in the short term.”

Industry players pegged the current tax rates on these appliances in the range of 23-26 per cent.

Selling price

Manish Sharma, President and CEO, Panasonic India and South Asia, added, “Under the new GST tax slab, a price rise of 4 per cent and upwards can be expected for consumer durables. We believe this price shall get neutralised in a couple of months. The trade partners though might have a slight impact due to input tax but they can recover by increasing their selling price.”

Meanwhile, Sunil Wadhwa, CEO, Groupe SEB India, said that products such as mixer grinders, juicers and air coolers should not have been equated with white goods like refrigerators and air-conditioners.

“At present, we have no clarity on how the present excise exemption will work, post GST. In addition, there are going to be multiple costs associated with old stocks, compliances and increased cash flow requirements,” he added.

Published on May 19, 2017 17:18