GST Council slashes rate from 28 to 18 percent on various products.
The GST Council on July, 21 gave a great monsoon bonanza to consumers by exempting and reducing tax rates on several necessary items. The new tax rates would be applicable from July 27, the interim Finance Minister informed. Furthermore, traders with turnover up to Rs 5 crore will have to deposit GST monthly and also a relief to not file the returns quarterly. Reports claimed that the tax reductions will cost the Modi government a loss of nearly Rs 7,000 crore.
The GST Council has decided to exempt Sanitary napkins from the current GST. Prices have been lowered, availability has been increased and awareness has also been increased, all these have led the sanitary napkin market to go up. According to the report on ‘India Sanitary napkin/pad, Tampon & Pantyliners Market Outlook, 2023’ published by Bonafide Research, India’s overall market for the sanitary napkin is anticipated to reach more than 13,000 units at the end of 2023. It has grown with 20% of CAGR in value terms during the review period starting from 2011-12 to 2016-17.
GST on Kitchen appliances such as food grinders and mixers & food or vegetable juice extractor is slashed from 28% to 18%. Better awareness, promotion of the products, the consciousness of diseases and various campaigns are promoting the importance of juices in everyday life. This is expected to result in the market’s growth. According to a recently published report of Bonafide Research “India Mixer, Juicer & Grinder Market Outlook, 2021”, the market for juice extractors/juicers will grow at a CAGR of more than 20% over the next five years. The juice extractor segment is an integral part of the electric kitchen appliances market, which is currently growing at a significant pace.
GST on Washing Machines is slashed from 28% to 18%. A good monsoon plays a very crucial part in generating the demand for consumer durables in rural Indian markets. For last three years, India has constantly witnessed back-to-back droughts and below normal rainfalls. The after-effects of poor monsoon dragged down rural growth and resulted in a stagnant washing machine market for rural areas. However, the forecast of a good monsoon in 2018 has made players hopeful and all strategies have been carried out to beef up the demand this season and the now new slashed GST on washing machines will further increase its demand in near future. According to a recently published report of Bonafide Research “India Washing Machine Market Outlook, 2022”, the majority sales of the washing machine comes from urban cities whereas rural penetration still stands at less than 1%. India is still an urban-centric market with the demand of products like washing machines being mainly triggered by the top 40 cities of the country.
GST on Refrigerators and Cold Freezers has slashed from 28% to 18%. The hot and humid weather conditions have made consumers increasingly concerned about food spoilage and hygiene level which has to lead to an increase in demand for efficient refrigerators. According to a recently published report of Bonafide Research “India Refrigerator Market Outlook, 2022”, overall refrigerator sales volume is expected to grow with a CAGR of more than 5% over the next four years. The direct cool segment dominates the refrigerator market with a 70% volume share and the rest 30% is of the frost-free segment in the year 2015-16.
GST on Water Heaters is slashed from 28% to 18%. The Indian water heater market has shown the immense potential of growth riding upon the rising disposable income, better standard of living along with a boost in the housing industry in the country. The modern-day water heaters bring in the added safety features coupled with high technological features and aesthetic looks that suit the modern styled bathrooms. Gone are the days when water heaters used to be a boring tank mounted on the wall. The innovation in the industry has given the slickest designs of the water heaters commonly known as “Size Zero”. The construction sector is one of the major market drivers as many water heaters are installed in new homes. According to a recently published report of Bonafide Research “India Water Heater Market Outlook, 2021”, water heater market is estimated to grow with a CAGR of 14.05% till 2021.
GST on Personal Care Appliances is slashed from 28% to 18%. The never-ending obsession among the youth to look young and beautiful is impacting the demand for personal care appliances and this demand is expected to boost up in the future. It includes hair dryers, hair Straightener, hair curlers, trimmers, shavers that are used in day to day life of consumers. According to the report on ‘India, Personal Care Appliances Market Outlook, 2023’ published by Bonafide Research, India’s overall market for personal care appliances is anticipated to reach more than 21,000 thousand units at the end of the forecast period.
GST on Perfumes is slashed from 28% to 18%. The booming category of women’s perfumes increased affluence, greater social interactions, growing urge among urbane working females to stay well-groomed are some of the key drivers for the growth of the perfume market in India. According to a recently published report of Bonafide Research, “India Perfume Market Overview, 2016-2022”, even though big names have entered the perfume market in India, the small scale and unorganized players dominate the category. Currently, the perfume market is bustling mostly with international players that come under the organized section of the market. Price has been the biggest concern when it comes to buying a branded perfume. Ideally, Indian consumers look for perfumes that are ranged between Rs. 100 to Rs. 500 or maximum upto Rs. 1000 as a major portion of the buyers are still not ready to pay something above Rs. 1000 for a personal grooming product like perfume.
GST on Paints is slashed from 28% to 18%. With the paint industry growing faster and faster, due to the increased level of education, customer awareness, and willingness to spend, this has brought about a revolutionary change in the paint industry. According to the report on ‘India Paint Market Outlook, 2023’ published by Bonafide Research, the paint market has grown with a CAGR of more than 12% in volume terms during 2011-12 to 2016-17 period. It is made up of the decorative paint industry and industrial paint industry. The decorative industry is bifurcated into Emulsion (Interior & Exterior), Enamel, Cement Paint (distemper), primer and thinner, ancillary products (putties, wood finishes).
Such a reduction in the GST rate would allow these industries to grow further and this would fuel up the growth forecast of these industries. In the case of sanitary napkins, there would not be much difference in the price as the incoming GST credit would not be given to raw material suppliers through some rate cut would be there.