New Delhi [India], September 4 : Sunil Vachani, Chairman of Dixon Technologies, has hailed the recent GST reforms as "path-breaking", predicting a major boost for the consumer electronics sector.
With the GST on products like LED televisions and air conditioners slashed from 28 per cent to 18 per cent, Vachani believes affordability will increase, driving higher sales and market penetrationcurrently at just 20 per cent for LED TVs and 12 per cent for ACs. He anticipates strong festive season demand and sees India evolving into a global manufacturing hub as a result of these reforms.
"I think these reforms are path-breaking and they're going to have a huge positive impact on the industry. If you look at the industry of LED televisions and air conditioners, you would notice that the penetration levels of these products have been very low."
"Hardly about 20% of the people in the country own an LED television. Hardly about 12% of the people own an air conditioner. I think the issue was due to the affordability and with the GST coming down from 28% to 18%, these products will become more affordable. I think there'll be a huge trigger in terms of increasing consumption and sales of these products. Once that happens, you will see that India emerges as a base for manufacturing not only for the domestic market but also for global markets. I think these reforms have a huge positive impact. In the festive season, we are going to see an uptick in sales," he added.
In a major reform aimed at providing relief to households, farmers, businesses and the healthcare sector, Finance Minister Nirmala Sitharaman on Wednesday announced a sweeping reduction in Goods and Services Tax (GST) rates on a wide range of essential items, automobiles, agriculture inputs, and electronic appliances. Termed as the "Next-Gen GST Reform," the decision comes as a historic Diwali gift to the nation and is expected to ease the cost of living while boosting economic activity.
The 56th GST council meeting decided to rationalise GST rates to two slabs of 5 per cent and 18 per cent by merging the 12 per cent and 28 per cent rates.
GST rates on daily essentials items such as hair oil, shampoo, toothpaste, toilet soap bars, toothbrushes and shaving cream have been slashed from 18 per cent to just 5 per cent. Similarly, butter, ghee, cheese, dairy spreads, pre-packaged namkeens, bhujia and mixtures, utensils, feeding bottles, napkins for babies, clinical diapers and sewing machines will now attract only 5 per cent GST instead of the earlier 12 per cent.
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