The 56th meeting of the GST Council, held on September 3, 2025, in New Delhi, introduced a series of reforms aimed at simplifying the tax structure and making essential goods and services affordable to the end consumer. Among the sectors impacted by these reforms, the electronics sector, particularly consumer electronics, witnessed notable changes in GST rates, which are expected to create a significant impact on manufacturers, dealers and consumers in the supply chain.
Reduction in GST Rates on Consumer Electronics
One of the most significant announcements for the electronics sector was the reduction of GST rates from 28% to 18% on several widely used consumer electronic products which primarily include:
- Air-conditioning machines (HSN 8415)
- Television sets, including LCD and LED TVs (HSN 8528)
- Dishwashing machines, both household and other types (HSN 8422)
The rate rationalisation brings all television sets under 18% GST slab, including those above 32 inches, which were previously taxed at 28%. The move is expected to reduce prices by 8%-9% across categories and make these products more affordable for consumers and stimulate demand, especially in the middle-income segment.
Implementation Timeline
According to the GST Council's recommendations, the revised GST rates will be implemented with effect from September 22, 2025. It provides businesses the time to adjust their pricing, invoicing, and compliance systems accordingly.
The reduction in tax rates for consumer electronics shall give leeway to Companies to pass on benefits to consumers through lowered prices which shall aid in improved sales, particularly in the upcoming Diwali season specifically with regard to products such as television and dishwashers. However, since the new rates shall be in effect from September 22, 2025, dealers may face difficulties in liquidating existing stock. This could affect sales and lead to potential revision of MRP's, competitive pricing and provision of discounts to match the reduced prices post September 22, 2025. Dealers may seek compensation from manufacturers on account of fall in margins as a result of staggered sales.
Further, it has been observed that suppliers of Air Conditioners (ACs) witnessed a dip in demand in the peak season owing to the early onset of monsoon. Therefore, dealers may not be heavily impacted in terms of management of existing inventory due to lesser placement of purchase orders for AC's in light of reduced demand in the summer season. The reduction in tax rates may not have a steep impact on sales of ACs with immediate effect. Overall, off season sales may not suffice to offset the losses accrued in peak summer. Increased sale of premium ACs in the upcoming summer season are expected as a result of lowered prices.
Companies have a transition period of around 15 days to prepare for implementation of the GST rate changes effective from 22 September, 2025. During the said period, Companies must ensure compliance with key requirements such as reversal of Input Tax Credit (ITC), treatment of common input services under the Input Service Distributor (ISD) mechanism, and other related adjustments. Timely preparation is imperative to avoid compliance issues which shall ensure a smooth transition to the revised GST framework.Companies must ensure that post supply discounts are granted to customers through issuance of credit notes in accordance with the proposed amendments to Section 34 of the CGST Act read with Section 15(3)(b) of CGST Act.
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