Hyderabad: A price rise in appliances due to the newly-introduced Goods and Services Tax (GST) has dampened consumer sentiments, leading to subduded sales in the festive season, said an official of Godrej Appliances. “The Rs 46,000-crore Indian appliances industry has been impacted by demonetisation (in the third quarter of fiscal year) and the implementation of the GST,” said Godrej Appliances’ excutive vice-president Kamal Nandi at an event to launch a new model of washing machine.
“The festive sales have been subdued so far, but we still have a few days left and we hope it will turn out to be a good one,” he said. Due to the ripple effect of demonetisation that spread over the calendar year 2017 and destocking caused by GST, he said the appliances industry had witnessed a comparatively lower growth of 5-6 per cent in the half of fiscal 2017-18.
The industry had grown by about 14-15 per cent in last fiscal. Mr Nandi, however, expects the industry to grow by about 10-12 per cent by the end of the year, with second half likely to grow at a much faster rate. Despite the slowdown in the industry (due to note ban and GST), he said the company expects to clock a revenue of Rs 4,000 crore this year which would be a 20 per cent increase from last year.
Mr Nandi said, “We don’t see any further disruption and with a low base in the second half of last year due to demonetisation, we expect a high rate of growth this year.” When asked about the impact of GST, he added, “During the VAT regime, the average tax was 24.5 per cent. While in the GST regime, it has gone up to 28 per cent which is a 3.5 per cent net increase. Keeping the festive season in mind, the company hasn’t raised its prices but may look at raising our prices in November.”