The consumer durables industry is expecting only a marginal price revision despite the category being placed under the highest tax slab of 28 per cent under GST, as players look forward to the festive season in the coming months, said a PTI report on Sunday.
The festive season accounts for up to 35 per cent of consumer durables sales. "In the short-to mid-term, I see the fundamentals remaining the same. Though consumer durables industry is being taxed at 28 per cent, which is slightly more than what the previous tax structure, I don't anticipate any major price increases in the coming months," BSH Household Appliances MD Gunjan Srivastava told PTI.
Srivastava said that he expects prices to remain constant at least in the initial period before people understand how much the additional cost would be. "But, that would take some time for people to accurately measure. We are also approaching the festival season, so the industry will like to moderate it," he added.
The tax rate for the sector was around 25-27 per cent, which has been hiked to 28 per cent under GST.
Godrej Appliances business head Kamal Nandi expected prices to go up by 1-2 per cent which could impact demand in the short-run, but expects it to pick up during the festive season. He told PTI that appliances have become a necessity now with evolving consumer lifestyle, and hence, a lower tax slab would have made appliances more affordable in a low-penetrated market.
"With 28 per cent tax under the GST, we expect the consumer price of home appliances to marginally go up by 1-2 per cent. This could have an impact on demand in the short- run," he said, adding, "Normal monsoons and the resultant boost to the agricultural economy and hike in allowances to government employees will propel demand during the forthcoming festive season."
Panasonic India Chief Financial Officer Manish Gupta said the company expects a revision in prices of select categories. "We are expecting the primary sales to retailers from companies to pick up from the second week of July," he said.