Budget 2024 Expectations: Consumer durable industry calls for 5-12% GST cut –

The consumer durables sector outlines important expectations for policy considerations as the budget draws near. The industry is pushing for a 5 or 12 per cent GST cut on both entry-level and luxury appliances in order to increase affordability and spur growth for all income brackets. In order to strengthen local manufacturing and create jobs, tax reductions for raw materials, components, and machinery improvements are emphasised, along with the necessity of continued support for the Production-Linked Incentive (PLI) plan and the Made in India initiative.

In fact, the Union Budget of 2024 plays a crucial role in keeping India as the world’s third-largest economy. With India contributing $3.7 trillion to the global economy and having the largest population of young people, there is a lot of untapped potential.

Let’s have a look at what the industry specialist foresee:

As per Kamal Nandi, Business Head and Executive Vice President of Godrej Appliances, the durables industry will gain from measures that reduce input costs, encourage technological innovation towards building energy-efficient products and lower taxation to induce appliance adoption and penetration in the country. “With temperatures rising above 50°C in many cities, ACs are certainly becoming a necessity. GST reduction will make ACs more affordable to masses and improve the quality of life for many more Indians. We also need to recognise the environmental impact of appliances and recommend addressing it with lower tax rates for consumers to switch to 5-star rated products,” Nandi added.

“Encouraging the use of automation is seen as pivotal for reducing costs and improving competitiveness in the business environment. Addressing human capital needs, there is an emphasis on skill development initiatives and industry-academia partnerships to upskill the workforce. Additionally, the industry advocates for regulatory streamlining to lower transaction costs and enhance the ease of doing business. Lastly, there is a plea for tax incentives promoting sustainable practices, aligning with global environmental goals and making sustainability a competitive advantage,” Mahesh Gupta, Chairman of Kent RO Systems stated.

For Avneet Singh Marwah, CEO, Super Plastronics Pvt Ltd, Exclusive Brand Licensee of Blaupunkt TVs in India, there is a need to focus on strategies that encourage spending and investment in order to boost the economy and tackle the rising inflation. “Keeping the 15% corporate tax rate for new manufacturing ventures would attract both local and international businesses to set up shop in India. One expected move is reducing the GST rate on LED TVs larger than 32 inches from 28% to 18%. Another proposal is to review income tax slabs to increase disposable income for taxpayers as it would likely lead to higher spending and boost consumption across various sectors,” Marwah explained. 

“As we look ahead to the upcoming Union Budget 2024,  we are highly optimistic about its transformative potential for the consumer durables sector. We eagerly expect the new government to bring in policies that support research and development, enhance infrastructure, and promote sustainable practices,” Harshit Aggarwal, CEO and Founder Novamax Appliances said. 

Interestingly, Arjun Bajaj, Director of Videotex believes that the Indian government should prioritise comprehensive support for the local manufacturing of electronics, including the television industry. “While mobile phone manufacturing has benefited from numerous incentives, the TV manufacturing sector, despite contributing nearly USD 12 billion to the economy, has faced neglect. Furthermore, the industry is heavily reliant on imports for critical components like semiconductors and display fabs, predominantly sourced from China and Taiwan. This dependence exposes the industry to price volatility and supply chain disruptions due to geopolitical tensions. While the government has initiated efforts to establish semiconductor manufacturing in India, it is crucial to expedite these projects and also focus on developing domestic display manufacturing capabilities. This would reduce dependency on imports, stabilise the supply chain, and strengthen the overall electronics manufacturing ecosystem in India,” Bajaj shared.