With just one day left for the new Modi government to presented the Union Budget for 2019-20 fiscal, consumer durables and home appliance manufacturers have sought for a lower tax slab and requested the government to provide incentives on manufacturing. Apart from rebate in taxes and change in industry policies, the Appliances and Consumer Electronics (ACE) industry also want the government to encourage manufacturing of energy-efficient products. Slashing down of the goods and services tax (GST) has been one of the major outcries of several industry and consumer durables too expect the same as the current slabs are too high and is significantly hurting the buying sentiment among customers.
Speaking about the same with news agency PTI, Godrej Appliances Business Head & EVP Kamal Nandi said, “Consumer appliances as refrigerators, washing machines, and ACs are no longer considered luxury items. Such consumer appliances need to be made more affordable to the consumers and be put in a lower tax bracket from 28 percent to 18 percent,” Over the past three years, the consumer durable industry has witnessed low to almost no growth. The penetration level for durables has drastically dipped across the country over the last five years.
The penetration level stands as low as 30 percent for refrigerators (92 percent in China), 13 percent for washing machines (88 percent in China) and 60 percent for television (95 percent in China). Various reports suggest that manufacturers are also expecting a reduction in tax on the energy efficient 5-star and 4-star products in order to pump up the volume of sales. “There should also be incentives for manufacturers to produce energy-efficient products which will be in line with the government’s focus on sustainability as well as its Make in India initiative,” Nandi added.
Even some leading players in consumer durables market including Sony India and Panasonic feel that there is a need to boost demand in the consumer appliances sector and lower taxes can help manufacturers pass on the benefits to buyers. Besides, these firms are seeking exemption of basic custom duty on imported TV panels that are assembled here in India to give a necessary push to the market.
“I am really hoping that the government does something. It is in our wish list,” Sony India Managing Director Sunil Nayyar told PTI when asked if the company was hopeful of reduced GST rates on big-screen television sets. He further said that lower GST rates will ultimately help the government increase its revenue as more and more people will tend to buy such goods. “It’s a win win. It’s up to them as how they structure this discussion and come to an appropriate thought process. We are expecting and hopeful. Let’s see,” Nayyar added.
Sharing similar views, Manish Sharma, President and CEO, Panasonic India and South Asia said that the GST slabs for large appliances and electronics items must be reduced. “Our expectation from the Union Budget 2019 is to see reforms that drive consumption and improve consumer demand. The consumer appliances industry witnessed a flat growth last year, and we urge the government to bring in positive policies to lend support and drive growth in the sector,” he said.
Sharma further said that appliances such as TVs, refrigerators and airconditioners have evolved from being luxury items to household necessities, and it is important to create affordability to drive consumers demand. The reduction in GST rates for TVs above 32 inches to 18 percent will not only benefit the industry but also the end-consumers, he added. At present, the GST on TVs with a screen size above 32 inch attract 28 percent GST while it is 18 percent on those with size of 32 inch and below.―ABP Live