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New GST Rate On Air Conditioning Machines, Dish Washing Machines, Television Sets / New GST Rate on Consumer Electronics – Key Highlights from the 56th GST Council Meeting

The 56th meeting of the GST Council, held on 3rd September 2025 at Sushma Swaraj Bhavan, New Delhi under the chairpersonship of Union Finance & Corporate Affairs Minister Smt. Nirmala Sitharaman, brought much-needed relief to consumers and industry stakeholders alike.

One of the most significant announcements was the reduction of GST rates on consumer electronics from 28% to 18%, effective 22nd September 2025.

This move is aimed at benefiting the common man, aspirational middle class, and trade & industry, making essential home appliances and electronics more affordable.

Goods Covered Under the Rate Reduction

The following categories of consumer electronics will now attract 18% GST instead of 28%:

Impact of the GST Rate Reduction

1.    Cheaper Consumer Durables – The reduction from 28% to 18% will directly lower the prices of air-conditioners, dishwashers, and television sets.

2.    Boost to Middle-Class Consumption – Electronics like ACs and TVs are aspirational products for the growing middle class, and reduced tax burden will encourage higher demand.

3.    Industry Relief – The consumer durables sector has long requested rationalization of GST rates, and this decision is expected to stimulate sales and inventory turnover.

4.    Support to Trade – Lower compliance burden and increased affordability will drive growth in both urban and semi-urban markets.

Frequently Asked Questions (FAQs)

To address potential doubts, the GST Council has also issued clarifications. Below are some key queries:

1. When will the new GST rates apply?

• The revised rates will be effective from 22nd September 2025.

2. Which notification will give effect to the revised rates?

• The changes will be notified through the Official Gazette notifications under the CGST, SGST/UTGST, and IGST Acts.
• Notifications will also be published on the CBIC website.

3. What happens if supply was made before the change but invoice issued later?

• As per Section 14(a)(i), CGST Act 2017:
• If payment is received after the rate change → time of supply = earlier of payment date or invoice date.
• If payment was received before the rate change → time of supply = date of payment.

4. What if advances were received but supply/invoice is pending?

• The applicable GST rate will be determined as per time of supply provisions under Section 14.

5. What happens to ITC on purchases made before the change?

• As per Section 16(1), CGST Act 2017, ITC is available for the tax charged at the prevailing rate at the time of supply.
• Subsequent rate reductions do not affect the entitlement to ITC, provided conditions under Section 49 are met.

6. Can I use ITC accrued at higher rates for outward supplies now taxed at lower rates?

• Yes. Once ITC is duly credited in the electronic credit ledger, it can be used to pay any output tax liability as per Section 49(4), CGST Act 2017, irrespective of later changes in GST rates.

Conclusion

The reduction of GST rates on consumer electronics from 28% to 18% marks a significant pro-consumer and pro-industry reform by the GST Council. By making essential and aspirational home appliances more affordable, the decision is expected to boost household consumption, support the manufacturing sector, and increase market penetration of durable goods.

The accompanying FAQs provide necessary clarity to ensure smooth transition and compliance for taxpayers and businesses.

This rationalization of rates demonstrates the Council’s continued efforts to balance revenue interests with consumer welfare while fostering ease of doing business.

Disclaimer: All the Information is based on the notification, circular advisory and order issued by the Govt. authority and judgement delivered by the court or the authority information is strictly for educational purposes and on the basis of our best understanding of laws & not binding on anyone.

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