Government Slashes GST on Large Appliances: TVs, ACs, Refrigerators, Washing Machines Could Get Cheaper

The Goods and Services Tax (GST) Council has decided to lower tax rates on several consumer goods, including air conditioners and large televisions. This move is expected to enhance sales during the festive season. Experts anticipate a decrease in appliance prices, which could boost demand and make these products more affordable for consumers.

In its meeting on September 3, 2025, the GST Council eliminated the 12% and 28% tax slabs, retaining only the 5% and 18% slabs. As a result, items like air conditioners, large-screen TVs, refrigerators, and washing machines will now be taxed at 18%, down from the previous 28%. Products previously under the 12% slab will transition to either 5% or 18%, depending on their category.

Impact on Consumer Goods

This change translates into immediate savings for households. According to a PTI report (via TOI), an air conditioner could now cost Rs 1,500 to Rs 2,500 less, depending on the model. Industry executives believe this reduction will not only drive sales volumes but also encourage consumers to opt for premium, energy-efficient models.

Blue Star's Managing Director B Thiagarajan described the proposal as a "great move" that should be implemented swiftly. Panasonic Life Solutions India's Chairman Manish Sharma estimated a 6-7% reduction in effective prices, calling it "phenomenal." Kamal Nandi of Godrej Appliances noted that this cut could increase AC penetration in India from its current rate of just 9-10%, thereby enhancing many households' quality of life.

Television Market Benefits

The timing is also advantageous for television manufacturers. Larger sets above 32 inches, previously taxed at 28%, will now attract an 18% rate. Avneet Singh Marwah, CEO of SPPL-which produces TVs under various global brands-stated that brands could experience a 20% year-on-year growth. He added that reducing GST on 32-inch smart TVs to 5% would be a "game changer," particularly against unorganised sector competition.

This decision provides relief for appliance makers who faced challenges during a weak June quarter. An early monsoon and unseasonal rains negatively impacted cooling product sales. Companies like Voltas, Blue Star, and Havells reported revenue declines of up to 34% in their air-conditioning divisions.

Simplified GST Structure

This marks the most significant rationalisation since GST's introduction in July 2017 with four slabs: 5%, 12%, 18%, and 28%. The new two-slab structure aims to simplify taxation while aligning with its original goals of affordability and increased consumption.

The timing aligns with Prime Minister Narendra Modi's recent promise of a "Diwali gift" through GST reform during his Independence Day speech. The Council's decision fulfils this pledge by setting the stage for a consumption-driven boost as the festive season begins.