AC, TV Dealers See Spike In Sales On Day One As Lower GST Rate Takes Effect

Lower GST rates spark sales surge as AC, TV dealers report first-day spike

Sales of air-conditioners and televisions have dramatically increased as reduced GST rates became effective on Monday.

New Delhi:

With the implementation of lower GST rates on Monday, sales of air-conditioners and television sets have experienced a remarkable surge as consumers rushed to take advantage of reduced prices offered by retailers at the beginning of the Navratra festival.

Local kirana stores also reported a moderate increase in sales of everyday essentials and food items.

The newly implemented two-tier GST structure featuring 5% and 18% tax slabs has replaced the previous four-rate system following the GST Council's comprehensive reform initiative aimed at stimulating consumption nationwide.

This reform has resulted in price reductions across numerous commonly used items ranging from food products, toiletries, and cosmetics to consumer electronics such as televisions and air-conditioners starting Monday, which coincides with the commencement of the nine-day annual Navratra celebration.

Home appliance dealers reported that room air conditioners (RAC), now taxed at 18% instead of the previous 28%, saw nearly double the sales on the very first day of implementation.

"Initial trends for regular primary sales are encouraging. By 5 pm, our dealers had reported almost twice the sales compared to a typical Monday," Haier India President N S Satish informed PTI.

He added that being a weekday, additional purchases were anticipated after office hours. The company had initiated pre-booking even before the revised GST rates came into effect.

Blue Star Managing Director B Thiagarajan commented: "Based on inquiries, I believe the mood is very positive." "Early estimates suggest growth will be approximately 20% compared to last September. E-commerce platforms launched major sales today, and many consumers are monitoring prices before making purchase decisions. Several of our dealers purchased inventory today under 'Shub Aarambh- New Muhoort' sentiments," he stated.

Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd (SPPL), which manufactures televisions under licenses from global brands including Thomson, Kodak, and Blaupunkt, reported a 30-35% increase in sales on the first day of GST 2.0. The company distributes televisions through the e-commerce platform Flipkart.

"Sales of television sets with 43-inch and 55-inch screen sizes, which benefited from GST reductions, have grown by 30 to 35%," he noted.

At some retail outlets selling daily necessities and food items, confusion persisted regarding revised MRPs, with customers observed disputing prices with shopkeepers.

Several companies are still gathering data on first-day sales and will provide final updates by Tuesday.

Until Monday, home appliance sales had nearly stalled as consumers delayed purchases in anticipation of the nationwide implementation of new GST rates.

Encouraged by the initial response, appliance manufacturers and dealers anticipate high double-digit sales growth during the festive season stretching from Navratra through Diwali.

Sales during this period typically account for approximately one-third of overall annual sales value across categories.

Prices of daily essentials and food products have also decreased from Monday, as FMCG companies have reduced prices to pass GST benefits to consumers.

Companies operating in the fast-moving consumer goods sector have introduced revised maximum retail prices (MRPs) for their products, including soaps, shampoos, baby diapers, toothpaste, razors, and after-shave lotions.

Parle Products Vice President Mayank Shah reported strong distributor-level sales as channels were previously depleted.

"This will now cascade down to retailers and consumers," he explained.

Regarding primary sales at the retail level, he noted it was premature to comment. However, he anticipated improvement in purchasing across these channels by week's end as the festive season progresses.

Shah also mentioned that confusion regarding prices and GST would likely be resolved within days, leading to improved consumer purchasing.