The Government of India has reduced the Goods and Services Tax (GST) on consumer durables such as televisions above 32 inches and air conditioners from 28 percent to 18 percent. The new GST rates, effective 22 September 2025, are expected to lower retail prices for a 40-inch Smart TV and a 1.5-ton AC by nearly 8 to 9 percent, according to industry estimates.
GST Reform and Its Impact on Consumer Electronics
The latest GST overhaul, announced after the 56th GST Council meeting, simplifies India’s tax structure. The previous four slabs—5, 12, 18, and 28 percent—have been reduced to two broad rates of 5 percent and 18 percent, along with a 40 percent rate for luxury and sin goods.
Finance Minister Nirmala Sitharaman said the reform aims to reduce compliance, stimulate consumption, and align India’s indirect tax system with global standards. “By bringing down the tax on household essentials such as televisions and cooling appliances, we expect greater affordability and higher demand during the festive season,” she said at a press briefing.
Price Change: 40-Inch Smart TV
For a mid-range 40-inch Smart TV priced at ₹22,000 before tax:
- Under the old 28 percent GST, the final price was about ₹28,160.
- With the new 18 percent GST, the final price is reduced to roughly ₹25,960.
This means consumers can expect to save approximately ₹2,200 per unit, or nearly 7.8 percent on average.
Price Change: 1.5-Ton Air Conditioner
The effect on air conditioners is more significant. A 1.5-ton AC that previously retailed at around ₹30,000 under the 28 percent GST regime will now cost approximately ₹27,600 under the reduced rate.
Retailers such as Voltas, LG, and Blue Star estimate a saving of ₹3,000 to ₹4,000 per unit depending on the model. According to an analysis published by the Economic Times, the overall reduction is in the range of 8–9 percent, which may boost demand ahead of the festive season.
Industry and Retail Reaction
Consumer electronics retailers have welcomed the move, calling it a timely stimulus. Manish Sharma, Chairman of Panasonic India, said the reduction “will make premium technology products more accessible to middle-class households and encourage upgrades in time for the festive season.”
Meanwhile, experts warn that while the tax cut lowers retail prices, manufacturers may not pass the full benefit to consumers due to input cost pressures. According to Anuj Sethi, Senior Director at CRISIL Ratings, “The effective price reduction will vary by brand and model, but overall demand is likely to see a strong uptick in the coming quarter.”
Broader Economic Context
The GST revision is part of a wider strategy by the government to stimulate domestic consumption and support the electronics sector, which has been hit by slowing demand and high inflation. By cutting taxes on consumer durables, policymakers hope to drive growth in the urban middle-class market and indirectly support manufacturing and jobs.
India’s consumer durables market is projected to grow by 10 to 12 percent annually over the next five years, according to a report from the Confederation of Indian Industry (CII). Analysts note that GST reforms could accelerate this trend by easing household budgets and encouraging discretionary spending.
Conclusion
The GST reduction on televisions and air conditioners is expected to make these household items more affordable for millions of Indian consumers. With an average saving of ₹2,200 on a 40-inch Smart TV and up to ₹4,000 on a 1.5-ton AC, the government hopes to stimulate festive sales and reinforce its broader economic recovery plan.
