Consumer durable retailers expect a bumper Diwali post-GST rate cuts

Pune: Consumer durable makers and retailers are expecting a bumper festive season with GST cuts coming just ahead of Diwali.

The reduction in GST rates for white goods like ACs and TVs from 28% to 18% could spur buying sentiment, said retailers. Rohan Kumar, a resident of Wanowrie, is already planning some purchases next month. "We were anyway planning to buy a bigger television. The new reduction in prices will be in addition to the festive discounts, so it will be a good deal," he said.


Savita Kulkarni, a resident of Kothrud, plans to exchange her old air-conditioner for a new one. "Usually, prices of ACs are highest in the summer, so we delayed the purchase. Now with this price reduction, we will definitely opt for the exchange option," she said.

Nilesh Gupta, managing director at Vijay Sales, said that because of the nature of the industry, all manufacturers will pass on price reductions to consumers. "It could translate into a price drop of Rs 3,000-Rs 5,000 for ACs, and for larger televisions, the reduction could be as high as Rs 10,000. We are expecting at least a 15% growth over last year this festive season," said Gupta. Owing to the early arrival of monsoon, summer was not so good for retailers this year, and therefore they are hinging their hopes on this rate cut to drive sales this festive season.

Kamal Nandi, business head & EVP at the appliances business of Godrej Enterprises Group, said that ACs are estimated to be around 10% penetration levels. The drop in GST improves affordability for consumers and is expected to improve product penetration levels over time. "We estimate the effective price reduction to be around 7.8%, and for ACs, we expect a 50% growth in demand over the last festive period," he said.

Shibashish Roy, CEO & managing director, Infiniti Retail, said, "In televisions, with GST on all sizes now harmonised at 18% (from 28% for 32-inch+), large-size and premium tech panels will see shelf-price corrections. Combined with promotional push, this could lift category growth, with OLED and QLED panels potentially doubling growth. For dishwashers, already growing at 20–22% CAGR, the GST cut to 18% is expected to accelerate category growth."

Manish Sharma, chairman, Panasonic Life Solutions India, said, "With this reduction, products that were earlier seen as aspirational are now more accessible, allowing a larger section of households to upgrade to energy-efficient and connected appliances. This move, coupled with the recent revision in the income tax slab exempting annual earners up to Rs12 lakhs, is expected to significantly boost disposable incomes and consumer sentiment."