GST Rate Cut: ACs, TVs, and Fridges to get cheaper, but no relief on smartphones

The industry had high expectations regarding mobile phones in the meeting, but the GST Council did not reduce the tax rate on smartphones.

New Delhi: A big decision related to consumers was taken in the meeting of the Goods and Services Tax (GST) Council held on 3 September. The government has reduced the tax on several electronic products. Now many household and electronic goods have come in the slab of 18% instead of 28%. However, smartphone customers have not got any relief this time.

No Change On Smartphones

The industry had high expectations regarding mobile phones in the meeting, but the GST Council did not reduce the tax rate on smartphones. At present, mobile phones will remain in the 18% GST slab. Experts say that smartphones already fall in the 18% category and it was not possible to bring it down to 5%. Therefore, consumers will not get any benefit this time.

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On Which Products Was Tax Reduced?

Air Conditioner (AC): Earlier 28% GST was levied, which has been reduced to 18%.

LED/LCD TV: TVs larger than 32 inches will now come under 18% GST slab instead of 28%. (Smaller TVs were already taxed at 18%.)

Computer monitors and projectors: These will now attract 18% GST instead of 28%.

Dish washing machine: Tax rate on kitchen appliances has also been reduced to 18%.

Lithium ion battery: Batteries falling under 8507 category will now be in 18% tax slab instead of 28%.

How Much Will Be The Benefit?

With the reduction in tax, the prices of many products will now come down. According to reports, the price of air conditioners can come down by Rs 1,500 to Rs 2,500 depending on the model and brand. Appliances like TVs, monitors and dishwashers will also now be cheaper than before. Industry experts believe that this decision will increase the demand in the electronic market and more customers will be inspired to buy these products.

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Mixed Response From Customers

While this is a relief for those buying large household appliances, smartphone users are disappointed. People believe that the prices of mobile phones should also have been affected as it is a necessity for every household. But the council believes that the tax on smartphones is already at a rational rate.

Overall, this decision of the GST Council has made products like AC, TV and fridge pocket-friendly. Now it remains to be seen how much this tax cut boosts the electronic market and to what extent customers are able to benefit.