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Consumer durable industry demands lower GST on products
As the Narendra Modi-led government is all set to present its maiden budget of its second term in office on July 5, consumer durable industry expects the government to implement more consumer friendly policies as it wants abolition of the customs duty on open cells which is now put at 5 per cent.
“In fact, Consumer Electronics and Appliances Manufacturers Association (CEAMA) has submitted a plan for phased manufacturing of TVs and its sub parts to the government in 2018 to encourage local end to end manufacturing of televisions in the country,” said CEAMA president Kamal Nandi.
In open cell manufacturing, companies import television panels in open-cell state which would require further assembling before being ready to be used into television assembling.
“Expedition in implementation of the PMP is the need of the hour. We, also recommend implementing a phase manufacturing programme (PMP) for components of Air Conditioners as many of these key inputs – especially compressors – are mostly imported. Therefore, there is a significant need to promote indigenisation of AC’s in the country. It will give a positive signal to potential investors as well as help in aiding the ‘Make in India’ initiative,” said CEAMA president.
Nandi, who is also Godrej Appliances Business Head & Executive VP, added that, “The consumer electronics and appliance industry has witnessed low to no growth in the last three years. The penetration level for durables has traditionally been low in India and despite more than 5 decades, it stands at as low as 30 pc for refrigerators (92 pc in China), 13 per cent for washing machines (88 pc in China) and 60 pc for televisions (95 pc in China). We urge the government to lower GST rates for key consumer products like air conditioners and TV above 32 inches (all sizes) as these products are the basic necessity of a household and not a luxury.’
Furthermore, reducing GST rates for TVs above 32 inches and air conditioner from 28 to 18 pc will give the much needed boost to the sector and will create more employment opportunities.
“The reduction will also make the product more affordable to the consumer. Further, 5 star rated energy efficient products across categories should be brought to a lower slab to incentivise consumers to shift to more efficient products,” said Nandi.
“Our expectations from the Budget are high. The ACE industry is looking forward to the continuation of steps taken for the indigenisation of the industry with a focus on domestic manufacturing, creating better employment opportunities and rural growth,” said Johnson Controls-Hitachi Air Conditioning India Limited Chairman & Managing Director Gurmeet Singh.
In addition to that, we expect the government to take further steps towards strengthening the bourgeoisie as well as MSME sectors. “The MSME sector has a big role in our sales, logistics, services, and vendor network. Facilitation measures taken by the government for this sector will help in the growth of the electronics business. In terms of policies, we are anticipating a reduction in the GST rates, especially for air conditioning products, to boost the ACE sector,” he added.
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