How much cheaper can AC become due to change in GST rates? understand all the mathematics

By Samira Vishwas On Jan 19, 2026

The government is considering reducing GST on air conditioners (ACs) to 18 percent from the current 28 percent. Once this proposal is implemented, AC prices may reduce by Rs 1,500 to Rs 2,500. The industry believes that this decision will boost sales during festivals and make ACs easier for people to access.

Blue Star Managing Director B. Describing it as a ‘brilliant step’, Thiagarajan said that people are now waiting for the government’s decision before buying ACs. He said that customers will get direct benefit of up to 10 percent as GST is charged on the final price.

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How much will the price decrease?

Panasonic Life Solutions India Chairman Manish Sharma said that if GST is reduced from 28 to 18 percent, prices will come down by six to seven percent. He told that this will save the consumer Rs 1,500 to Rs 2,500 depending on the model.

Kamal Nandi, Business Head, Godrej Appliances, said that AC penetration in India is currently only 9-10 percent. With the reduction in GST, it will be affordable for the common people and will improve the quality of life.

Sales will increase during festivals

Avneet Singh Marwah, CEO of TV manufacturing company SPPL, said that this move will increase sales on festivals and boost consumerism in the domestic market. He estimated that this could increase the brand’s annual sales by 20 percent. However, he suggested that 32-inch smart TVs should also be brought in the 5 percent tax bracket as a large part of this segment belongs to the unorganized market.

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According to the industry, the room AC business has been affected in the April-June quarter due to recent unseasonal rains and untimely arrival of monsoon. AC sales of companies like Voltas, Blue Star and Havells witnessed a decline of 13 to 34 percent. If the government takes this step soon, not only will the sales of ACs increase, but the demand for energy-efficient and premium models may also increase rapidly.