Modi magic.. AC, fridge, TV to cost LESS

New Delhi, Nov 20: After consumer products and other daily-use items, the government is now thinking of bringing down goods and services tax (GST) on consumer durables like washing machines and refrigerators from the current level of 28% as part of the next round of rationalisation.

According to a report in "The Times of India", while the move is expected to help push demand in the sector, amid repeated complaints of a slowdown and excess capacity, the exercise will also be aimed at women and will reduce their daily workload by making such white goods cheaper, said a senior government official, who did not wish to be quoted.

The official said that a part of the reason for lower levy on restaurants was also to free women from household chores, which begin with packing lunch for children in the morning and extend till late at night. Globally, products such as dish washers and washing machines are seen to be items which have unburdened women, leaving them with more time for themselves or other productive work. Besides, products such as dish washers are largely imported into India and lower local levies through GST may also provide an incentive to companies to manufacture them in India, instead of shipping them from South Korea and other countries. Several white goods are already in the 12% and 18% brackets.

M S Mani, partner at Deloitte India, said, "All consumer durables, if taxed uniformly at 18%, would give a big fillip to domestic manufacturers as this would also lead to significant price reduction, leading to increased demand. Several of them — such as dishwashers and air-conditioners — have, over a period of time, ceased to be luxuries, making an 18% rate a reasonable request."

Last week, GST rates on restaurants, other than those in five-star hotels, were slashed from 18% to 5%, although the withdrawal of input tax credit has prompted many chains to jack up prices. The cut came along with a reduction in levies for over 200 items, with 178 of them being from the top slab of 28%, leaving only 50 goods in the highest bracket.