GST Tax Structure for electronic items
Currently, the average VAT rate on most of the household appliances is charged around 11-12.5% in most of the states. Excise duty is charged at the rate of 12.5% on the household electronic appliances. An average total tax at the rate of around 25-26% on such goods (including CST and other local taxes)
The rate for each household electronic appliance like the fridge, washing machine, vacuum cleaner etc is fixed at the rate of 28% under GST. It is likely that the increase in the tax burden by 2-3% under GST would be passed on to the final consumer. Placement of the basic appliances such as fridge and washing machine under 28% slab shows that electronic appliances are still considered as a luxury by our government.
Manufacturers of such household electronic appliances like Samsung, Godrej, Voltas etc may not be able to provide any benefit of GST to the end consumer due to the tax rate of 28%. Clarifications are also required for the treatment of the current tax exemptions or deductions provided by the different states.