Diwali Gift from the Government: ACs, Large TVs, Refrigerators, and Washing Machines to Become Cheaper as GST Rates Slashed
The festive season of 2025 just got brighter for millions of Indian households. The Goods and Services Tax (GST) Council has announced a historic move, reducing tax rates on big-ticket consumer durable products such as air conditioners, large-screen televisions, refrigerators, washing machines, projectors, and monitors. This landmark decision not only benefits consumers by lowering prices but also provides a much-needed boost to the consumer electronics and appliances industry.
Why This Decision Matters
Until now, many consumer durables were placed in the 28 percent GST slab, making them relatively expensive for the average household. The GST Council has now simplified the structure, eliminating the 12 percent and 28 percent slabs and retaining only two—5 percent and 18 percent.
As a result,
- Products earlier taxed at 28 percent will now attract 18 percent GST.
- Goods in the 12 percent slab will move either to 5 percent or 18 percent, depending on the category.
- Prices are expected to drop by 6 to 9 percent, making appliances more affordable.
Industry experts believe that apart from higher sales, consumers will be more inclined to purchase premium and energy-efficient models, which were previously seen as expensive.
How Much Will Prices Drop
According to reports from PTI and The Economic Times:
- Air Conditioners (ACs): Prices may fall by Rs 1,500 to Rs 2,500 depending on the model.
- Televisions above 32 inches: Buyers could save Rs 2,000 to Rs 3,000.
- Dishwashers and Washing Machines: Price cuts of up to 8 to 9 percent are expected.
- Projectors and Monitors: Tax cuts will benefit corporate offices and educational institutions, boosting demand in these sectors.
Industry Reactions – A Potential Game Changer
Industry leaders are calling this a game changer for the consumer durable market.
- Avneet Singh Marwah, CEO of SPPL, commented:
“Bringing 32-inch smart TVs under the 5 percent GST slab will prove to be a game changer for branded companies. It gives them a competitive edge over the unorganized sector. We anticipate annual growth of up to 20 percent.” - Major appliance makers like Voltas, Blue Star, and Havells, who reported up to 34 percent decline in cooling product sales in the June quarter due to unseasonal rains and weak demand, see this reform as timely relief.
Benefits for Consumers
- Affordable Prices: Families can now plan to purchase a new AC or large-screen TV without straining their budgets.
- Shift to Energy-Saving Models: As premium and energy-efficient appliances become more affordable, consumers will move away from older, high-power-consuming products.
- Long-Term Savings: Lower electricity bills and better technology will enhance cost-effectiveness in the long run.
- More Festive Offers: Along with the GST cut, both e-commerce platforms and offline retailers are expected to launch aggressive festive season discounts, multiplying consumer savings.
Impact on the Industry
- Boost to Manufacturing: With increased demand, the electronics manufacturing sector will attract higher investments.
- Recovery for Appliance Makers: After a weak quarter, appliance companies will benefit from revived consumer sentiment.
- Stronger Branded Market: Reduced GST will make branded products more competitive compared to the unorganized sector, which dominated in lower price ranges.
The Journey of GST – 2017 to 2025
When GST was first implemented in July 2017, India had four tax slabs—5 percent, 12 percent, 18 percent, and 28 percent. Over the years, industry stakeholders consistently demanded a simplified system.
With the latest decision, the Council has moved to a two-slab structure of 5 percent and 18 percent. Policymakers argue that this reform makes the tax system more transparent, simple, and efficient, aligning with the goals of affordability and higher consumption.
The Promise of a Diwali Gift
On 15 August 2025, during his Independence Day speech, Prime Minister Narendra Modi promised a “Diwali gift” in the form of GST reforms. On 3 September 2025, the GST Council delivered on this commitment by approving the new structure.
The revised GST rates will officially come into effect from 22 September 2025, just in time for the festive shopping season.
Why Festive Sales Will Surge
The festive period, including Diwali, Navratri, and Durga Puja, is the most crucial shopping window for the Indian consumer durables industry.
- Demand for electronics and home appliances traditionally spikes during these months.
- With GST cuts lowering prices, middle-class and young urban consumers are expected to spend more.
- Companies project that sales in the 2025 festive season could rise by 25 to 30 percent compared to last year.
Conclusion
The government’s decision to slash GST rates on consumer durables just before the festive season is a win-win for both consumers and the industry.
- Households will enjoy direct savings.
- Appliance makers will see revived demand.
- Energy-efficient models will gain more traction.
- The GST structure itself will become simpler and more transparent.
This move, hailed as one of the biggest tax rationalizations since the inception of GST in 2017, truly lives up to its title of a “Diwali Gift”. It is expected to light up Indian homes with not just festive joy but also lasting financial relief and smarter consumption choices.
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