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retail | IST

Union Budget 2019: White goods makers seek cut in GST rate

Makers of white goods -- refrigerators, washing machines, air-conditioners, etc. -- are seeking a rate cut from the government in the upcoming Union Budget, which will be presented on July 5. Products like air-conditioners and large-screen televisions are still taxed at the highest GST rate of 28 percent.
Manufacturers are seeking a rate cut in order to boost demand through a reduction in product prices. Over the last three years, growth in the consumer durables or white goods space has been flat.
"Demand for most of the large appliances has been hit. Sales for these products like air-conditioners and refrigerators are down 30-40 percent," said Rahul Kothari, owner, Hrenkar Electronics.
A large number of customers are also looking to buy products using consumer finance services. “Customers don’t want to pay the full amount and buy the product. They prefer to buy via EMIs,” said Ramesh Jain, owner, Metro Sales.
According to Kunal Jain, owner, Monica Electronics, many customers are opting for unbranded products as they come with the same guarantee and warranty as branded products and are far cheaper.
Another demand that the industry has is for energy efficient products. Reduction of GST on energy efficient products with higher ratings will help more adoption of these products.
An important demand from the consumer durables sector is more incentives for component manufacturing. Increase in local manufacturing can help more adoption of indigenous products.