Lower GST rates power surge in AC & TV sales

The rollout of revised Goods and Services Tax (GST) rates on Monday brought an immediate boost in consumer demand, with sales of air-conditioners and television sets witnessing a sharp rise. The new GST structure, which took effect from yesterday, coincided with the start of the Navratri festival, prompting consumers to advance purchases of household appliances and essentials at reduced prices.

The GST Council’s sweeping reforms have replaced the earlier four-slab duty regime with a simplified two-slab structure of 5 per cent and 18 per cent. This has led to significant price cuts on a wide range of goods, including toiletries, cosmetics, food products, and large appliances such as televisions and air-conditioners.

Surge in appliance sales

In the home appliance segment, dealers reported an immediate surge in demand, especially for room-air conditioners (RAC), which now attract an 18 per cent GST rate, down from the earlier 28 per cent. According to Haier India President N S Satish, sales doubled on the first day compared to a typical Monday.

“Trends of primary regular sales are encouraging. Till 5 pm in the evening, our dealers have reported almost double sales, compared to any other Monday,” Satish told PTI. He added that sales were expected to pick up further after office hours, with pre-bookings already initiated before the rollout of the revised GST rates.

Blue Star Managing Director B Thiagarajan also reported a positive consumer response. “Going by the inquiries, I think the mood is upbeat. Rough estimate is that growth compared with September last year will be around 20 per cent. E-commerce players’ big sale begins today and the prices will be watched by many consumers before deciding to buy. Many dealers of ours have bought machines under ‘Shub Aarambh- New Muhoort’ sentiments today,” he said.

Television sales also registered a strong uptick. Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd (SPPL) the licensee for global brands such as Thomson, Kodak, and Blaupunkt said that sales rose by 30 to 35 per cent on Monday. “Sales of TV sets with 43-inch and 55-inch screen sizes, on which GST levy was reduced, have a growth of 30 to 35 per cent,” Marwah noted. The company primarily sells its televisions through Flipkart.

Impact on FMCG and essentials

Beyond appliances, the revised GST rates also benefitted daily essentials and fast-moving consumer goods (FMCG). Kirana stores reported a modest rise in sales of food items and household products. Prices of soaps, shampoos, baby diapers, toothpaste, razors, and after-shave lotions came down as FMCG companies updated their maximum retail prices (MRPs) to pass on GST benefits to consumers.

However, some confusion persisted on the ground, with customers disputing revised prices with shopkeepers. Several stores were yet to display updated MRPs, leading to minor arguments over billing.

Market trends and expectations

Until Sunday, appliance sales had slowed down as consumers deferred purchases in anticipation of the nationwide implementation of the new GST rates. Monday’s robust response, therefore, came as a relief to retailers and manufacturers.

Companies are still collecting data on first-day sales and are expected to release final figures on Tuesday. Initial estimates, however, suggest a strong start to the festive season.

Industry executives expect the upbeat sentiment to continue through the festival period, spanning Navratra to Diwali. This window usually accounts for nearly one-third of annual sales in the consumer durables and appliances category. With GST benefits now in effect, both appliance makers and FMCG firms are anticipating high double-digit growth during this season.

The GST Council’s decision to simplify the tax structure into two slabs 5 per cent and 18 per cent has immediately boosted consumer demand across categories. While air-conditioners and televisions have emerged as key beneficiaries with double-digit growth in sales, FMCG products and daily essentials have also seen price cuts passed on to buyers.

With the festive season just beginning, industry stakeholders are optimistic that the momentum triggered by the GST reduction will translate into strong sales through Diwali, offering a much-needed boost to consumption and retail growth nationwide.