Within the large appliances segment, room ACs, televisions larger than 32 inches, and dishwashers are among the few products that continue to attract the peak GST rate of 28%. The proposal to rationalize GST rates on ‘aspirational’ goods could potentially bring them under the 18% slab, According to analysts at Kotak Institutional Equities.
When GST was previously reduced from 28% to 18% on refrigerators and washing machines in July 2018, manufacturers such as LG, Samsung, Whirlpool and IFB passed on the benefit immediately to consumers, with an implied price reduction of around 8%.
However, the RAC segment in particular is expected to face cost pressures, with raw material inflation of 5–8% anticipated from the upcoming BEE efficiency changes effective January 2026. This could mean that only a partial benefit of the GST cut would reach consumers.
Analysts also highlight the possibility of benefits for players in the solar and water purifier categories, though they consider it a remote scenario. Crompton, Polycab and Eureka Forbes largely operate in categories taxed at 18%. Certain solar products, including water heaters, power generators and lamps, currently fall under the 12% tax bracket. If this is further reduced to 5%, the cost advantage compared with non-solar counterparts taxed at 18% would increase, potentially driving faster adoption.
There is also a chance that electric water purifiers, presently taxed at 18%, could see rationalization given their essential nature, which would provide an additional boost to companies in the category.
The footwear segment also stands to gain if the government revisits its earlier move on GST. In January 2022, GST on all footwear priced below ₹1,000 was raised to 12% from 5% to resolve the inverted duty structure problem, where tax on raw materials exceeded that on finished goods. Analysts note that for the rate to be cut back to 5%, the government would need to address this imbalance, likely by reducing GST on raw materials.