NEW DELHI: The recent GST rate cut on consumer durables is expected to boost demand for refrigerators and washing machines in the upcoming festive season as the products are likely to get cheaper by 7-8 per cent.
“For refrigerators and washing machines, the festive season will be a bonanza because of GST rate cuts,” said Manish Sharma, CEO of Panasonic India and president of industry body Consumer Electronics and Appliances Manufacturers Associations, on Wednesday.
On Saturday, the GST Council slashed GST rate on 88 items including televisions (up to 27 inch), refrigerators, mixer-grinders and washing machines from 28 per cent to 18 per cent. The new rates will be applicable from July 27.
Sharma said the 10 per cent reduction and a good monsoon season will boost demand for certain items that are now considered a necessity and not luxury. He remained skeptical about demand picking up for TVs: “Demand for TVs below 27 inches will go up, but for TVs above that, market sentiment is likely to drive the demand.”
The bigger TVs are not only devoid of GST rate cut, but also are experiencing a rise in their manufacturing cost because of input prices going up and fall in Rupee. It is expected that TV manufacturers might consider increasing price of high-end TVs from next month.
A fall in demand for TVs is also expected to hurt manufactures as AC sales have been very tepid during the summer season. “AC sales were bad this summer,” said Sharma.