GST Cut Lifts Hope for AC Firms in a Dull Year

After a mild, financially bleak summer, Indian air-conditioner companies are hoping for a second bite at the cherry this year.

- Abhinaba Saha

A 10-percentage-point cut in the goods and services tax (GST) on ACs has sparked hopes of a 'second summer' during the festive season, offering a much-needed lifeline to companies reeling from a washed-out June quarter.

With AC prices set to drop from 22 September, experts predict the tax cut will unlock pent-up demand and boost festive sales.

Earlier this week the GST Council cut the tax on ACs from 28% to 18% as part of a broader set of reforms that removed the 12% and 28% slabs and shifted most of those goods and services into the 5% and 18% slabs. It retained 40% GST for luxury and 'sin' goods.