The ministry of electronics and IT and the Department for Promotion of Industry and Internal Trade (DPIIT) have pushed for reduction of goods and services tax (GST) on large-screen LED televisions and airconditioners to 18% from 28% to revive demand in the festive season, said two senior industry executives. This is the first time that the ministry and DPIIT have pushed for a reduction in GST on these products and the industry is pinning its hopes on a tax cut in the GST Council meeting scheduled to take place in Goa on Friday. The recommendations have been routed to the GST Council through the finance ministry, said the executives. At present, televisions up to 32 inches attract 18% GST but those with larger screens attract 28% duty. Refrigerators, washing machines, and microwave ovens come under the 18% GST slab while air conditioner is the only appliance which is in the 28% tax segment. Television sales have slowed down significantly in the past two years.
As per the latest data from sales tracker GfK, online television sales declined 16% year-on-year in July in terms of absolute numbers while in offline retail the contraction was 1%. Air-conditioners sales have grown this year owing to a harsh summer, but more energy-efficient models with 4-star and 5-star ratings have not sold well because of high prices. The industry fears there might be pressure on AC sales in 2020 owing to upgrade in energy efficiency norms which will lead to a further increase in prices. Emails sent to MeitY and DPIIT did not elicit any response till press time. Television is the only category where there are two GST rates, said R Zutshi, senior director, LG India. “Sales of televisions up to 32 inches are declining, accounting for 55% share in overall sales as compared to 75% two years ago as consumers want to buy larger screens. They are also postponing purchases expecting a cut in tax,” he said.