Budget 2019: Income tax, GST revision to benefit consumer durables & home appliances industry

Consumer durables industry expects the government to announce a further reduction in GST on white goods like washing machines, refrigerators, TVs and air conditions.

Most of the major consumer durables come under the GST Slab rate of 18%.

Budget 2019: As Interim Budget 2019 is on the anvil, the consumer durables industry expects the government to announce a further reduction in GST on white goods like washing machines, refrigerators, TVs and air conditions. Currently, most of the major consumer durables come under the GST Slab rate of 18%. The consumer durables industry has also pegged its hope on Income Tax slab restructuring by the Finance Minister in Budget 2019, as less income tax will leave more disposable income in the hands of a middle class which is the primary market for the industry. To inspire local manufacturing in the country, the consumer durables and appliances industry experts and stakeholders have time and again proposed to the government to further hike the customs duty on ACs, refrigerators, washing machines, microwave ovens, HDTVs/LEDs/OLEDs etc. Imports in FY2018 contributed 20% of the domestic market for washing machines, refrigerators, and approximately 30% for air conditioners. On the other hand, MSMEs in the consumer durables and home appliances expect better credit facilities so that the manufacturing can be expanded beyond the top five players currently.The consumer durables sector in India is expected to grow 8.5 per cent in 2018-19. The consumer durables and appliances industry witnessed a neutral FY 2018. The sales of consumer durables during festive seasons hiked, however, the demand was otherwise discouraging for the rest of the year. Depreciating the value of rupee and increased input costs further marred the buyer sentiment in FY2018 in the consumer durable market. The near-normal monsoon last year cowed the demand for air conditioners and refrigerators. The Modi Government has lately come to the rescue of the consumer durables industry. In the last GST council meeting, the FM announced a reduction of Goods and Services Tax on consumer durables and appliances like Televisions and monitors (up to 32”) from a monstrous 28% to 18%, apart from various other electronic goods. The last five budgets of the Modi government can be suitably called Pro-Rural. The government’s push for electrification under ‘Power for All’ in the rural sector is expected to pick up sales of consumer durables and appliances in the otherwise untapped sector of the economy. Demand for refrigerators is expected to go up with the change of season in the rural areas, while sales of televisions is expected to grow due to a consumer-centric change in GST rate.