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Experts say the Diwali GST cut could trigger the biggest drop in consumer prices in years, boosting sales and benefiting buyers whose incomes lag rising costs
The proposed GST reduction on ACs from the current 28% to 18% could lower their prices by approximately Rs 1500 to Rs 2500. (Representative/PTI)
In a festive boost for consumers, the government is slated to slash GST rates on several daily-use items, a move expected to lower prices ahead of Diwali. The revised rates, likely to be rolled out before the festival, are aimed at easing household expenses and bringing much-needed relief to the common man.
The government may also reduce the GST from 28% to 18% on TV sets larger than 32 inches, air conditioners (ACs), and dishwashers. This reduction could result in TV prices dropping by up to Rs 10,000, which home appliance manufacturing companies anticipate will boost sales during the festive period.
Industry experts believe that this reduction in GST ahead of a major festival like Diwali will stimulate substantial festive sales. They suggest that this GST cut could result in the most significant decline in consumer prices in years, especially benefiting buyers whose incomes have not kept pace with rising prices, thus revitalising a stagnant market.
AC Prices May Drop By Rs 2,500
The proposed GST reduction on ACs from the current 28% to 18% could lower their prices by approximately Rs 1500 to Rs 2500, depending on the model.
According to a PTI report, Blue Star Managing Director B Thiagarajan has praised this move and urged the government to implement it swiftly. He mentioned that the price impact could be around 10% since GST is applied to the final price.
Panasonic Life Solutions India Chairman Manish Sharma noted that if GST on ACs and other appliances is reduced from 28% to 18%, their market prices could decrease by 6-7% as GST is typically calculated on the base price. Sharma added that the price reduction for ACs would range from Rs 1500 to Rs 2500, varying by model. Godrej Appliances stated that the proposed tax slab reduction would significantly boost consumption and appliance demand.
Cars Will Also Become Cheaper
Cars will also become cheaper as entry-level hatchbacks, small sedans, and mini-SUVs could be included in the 18% GST tax slab. Currently, these vehicles face 28% GST and an additional 1-3% cess, bringing the total tax to 31%.
Should the GST reduction take effect, vehicles such as the Maruti Suzuki Alto K10, Maruti Suzuki S-Presso, Renault Kwid, Maruti Suzuki Wagon, Maruti Suzuki Dzire, Hyundai Aura, Tata Tigor, Tata Punch, Hyundai Xstar, and Renault Kiger will see a decrease in prices.
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