GST rate cut set to spur growth in electronics sector

New Delhi, Sep 9 (IANS) The next-gen reforms in Goods and Services Tax (GST) rolled out by the government are set to boost consumer electronics and Information and Communication Technology (ICT) hardware sectors as higher demand will strengthen domestic manufacturing, supporting MSMEs and start-ups, and advancing the goals of Digital India and Aatmanirbhar Bharat, according to a statement issued by the Ministry of Electronics & IT.

The reduction in GST on air conditioners, dishwashers, and large-screen televisions (LCD and LED) from 28 per cent to 18 per cent is expected to expand domestic demand while enhancing affordability for households. This is likely to create stronger backward linkages in components such as compressors, displays and semiconductors, and provide new opportunities for MSMEs engaged in plastics, wiring, cooling systems, LED panels and assembly services, the statement said.

The reforms also support localisation and reduce dependence on imports, with the GST cut on dishwashers additionally improving ease of living for households.

GST on monitors and projectors (non-TV) has been reduced from 28 per cent to 18 per cent, which will lower costs for educational institutions, offices, and digital learning centres. Affordable ICT hardware will directly support the IT sector, the start-up ecosystem and digital education. Similarly, the reduction in GST on electric accumulators (non-Li-ion, including power banks) from 28 per cent to 18 per cent will make energy storage solutions more affordable, improving access to backup power for digital devices and encouraging the adoption of efficient energy systems in both homes and workplaces, the statement said.

The reforms also strengthen the internal security communication infrastructure. The GST on two-way radios (walkie-talkies) has been brought down from 12 per cent to 5 per cent, thereby lowering procurement costs for police, paramilitary, and defence forces.

Besides, the GST on renewable energy devices and solar photovoltaic cells has been cut from 12 per cent to 5 per cent, significantly reducing the cost of renewable energy deployment at both household and industrial levels.

Composting machines will also now attract GST at 5 per cent instead of 12 per cent, encouraging waste-to-energy solutions and composting technologies to further the vision of sustainable and smart cities.

These reforms are expected to drive growth across multiple segments of India’s electronics and technology ecosystem. By stimulating demand, reducing costs and creating opportunities for domestic manufacturers and MSMEs, the GST rate cuts will generate employment, support localisation and deepen India’s integration into global value chains, the statement added.

--IANS

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