Firms may pass on lowered GST rates on fridge, TV to consumers

MUMBAI: Consumer durables manufacturers plan to pass on the lowered rates of goods and services tax (GST) to consumers, reducing prices in categories like refrigerators, washing machines and mixer grinders.

The GST Council, the federal indirect tax body, on Saturday cut tax rates on 88 items. Taxes for refrigerators, washing machines, small screen TVs, storage water heaters, hair dryers, shavers, mixer grinders, vacuum cleaners and lithium-ion batteries, among others, were lowered to 18% from 28%.

“There will be a 7-8% reduction in prices of refrigerator and washing machines, which will be passed on to the consumers,” said Kamal Nandi, business head and executive vice-president at Godrej Appliances, the consumer durables division of Godrej Industries Ltd.

According to Nandi, growth of the consumer durable division in the period between July and September 2017 remained flat for washing machines while the refrigerator category grew marginally by 3% over the same period previous year due to high GST rates.

“Post the GST rates revision announced yesterday (Saturdday), we expect the refrigerator category to grow by more than 15% and the washing machine category to grow by 18-20%,” said Nandi.

With the introduction of GST in July last year, the consumer durables industry was affected, with the slab of 28% on white goods, said Gunjan Srivastava, managing director and chief executive officer, BSH Household Appliances, adding the market grew by 5-10% for both categories.

Now with the GST rates being revisited, Srivastava is awaiting the official communications, post which the company will work out the pricing strategy to pass on to the consumer.