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Budget 2020: ACs, refrigerators, imported kitchen appliances set to get costly

The Budget doubled basic custom duty from 10% to 20% on whole lot of imported products such as food grinder, juicer, shaver, epilator, geyser, room heater, hair dryer, electric iron, oven, coffee and tea maker, toaster and ceiling fan. The custom duty on wall fan has been hiked from 7.5% to 20%.

, ET Bureau|
Last Updated: Feb 01, 2020, 09.31 PM IST
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It also increased the import duty on components for home appliances like refrigerators, washing machines and air-conditioners by 2.5%.
KOLKATA: Consumer will have to pay 10% more for imported kitchen appliances and electronic personal care products, and shell out Rs 200-700 more on air-conditioners, washing machines and refrigerators with the budget enhancing taxes on these products or their components.

The Budget doubled basic custom duty from 10% to 20% on whole lot of imported products such as food grinder, juicer, shaver, epilator, geyser, room heater, hair dryer, electric iron, oven, coffee and tea maker, toaster and ceiling fan. The custom duty on wall fan has been hiked from 7.5% to 20%.

It also increased the import duty on components for home appliances like refrigerators, washing machines and air-conditioners by 2.5%. This includes refrigerator and air-conditioner compressors where custom duty was increased from 10% to 12.5%, while that of small motors used in washing machines and other products from 7.5% to 10%.

“The net impact of the 2.5% increase in custom duty on components will be few hundred rupees. Prices of air-conditioner, washing machine and refrigerators will be go up by about Rs 100-400,” said Godrej Appliances business head Kamal Nandi. “The duty increase will help to further develop the manufacturing eco system in the country in the long run and is aligned to the Make in India initiative,” he said.

The industry believes that the custom duty imposed on small appliances will boost domestic manufacturing. “This will boost make in India for small and kitchen appliances,” said home grown contract manufacturer Dixon Technologies chairman Sunil Vachani.

Bajaj Electricals CMD Shekhar Bajaj said the proposed import duty on kitchen appliances and personal care products will prevent dumping of products from China with the US sanctions. “Chinese companies have surplus capacities and this import duty will prevent any indiscriminate imports,” he said.

The industry also expects lowering of personal income tax rates and measures announced to boost rural economy will help the growth of the consumer electronics industry.

“The proposal to boost rural economy, infrastructure and enhance purchasing power of middle class, if implemented well would certainly be fruitful. It could further improve the consumption of consumer durable and electronics,” said Nikhil Mathur, managing director – India, at market intelligence firm GfK.

Manish Sharma, president & CEO at Panasonic India, said the move to encourage domestic manufacturing of mobiles and electronic goods in India is a welcome move while a definitive timeline would have helped further boost the industry sentiments.

“It is one of the vital steps towards establishing a robust, ecosystem for domestic manufacturing while also giving a boost to exports….Also, the increase in disposable income will drive consumption for the consumer durables industry which experienced flat growth in this fiscal,” he said.

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