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Fan Manufacturers Urges Government To Cut GST To 12%

The association has also asked the Bureau of Energy Efficiency to come up with its star rating norms for the fans.

A ceiling fan hangs in the bedroom of a standard room at a lodging facility. (Photographer: Daniel Acker/Bloomberg)
A ceiling fan hangs in the bedroom of a standard room at a lodging facility. (Photographer: Daniel Acker/Bloomberg)

Domestic fan manufacturers have urged the government to bring down the GST to 12 percent from 18 percent at present, saying duty reduction will help the industry in capacity building.

Reduction in GST slabs will not only help the fan industry to invest into the capacity expansion, but also in adaption of new technologies, said Indian Fan Manufacturers' Association.

The association has also asked the Bureau of Energy Efficiency to come up with its star rating norms for the fans, as it is voluntarily adopted by some of the manufacturers at present.

"We are requesting the government to bring it down to 12 percent as it a mass product. We believe that fan industry can serve its customers better if this slab could come down from 18 percent to 12 percent," said IFMA Chairman Atul Jain.

When asked whether fan makers will pass benefits of cut in corporate tax to customers, Jain said that it was "too early" to say but it would enable the fan makers to invest more in the industry.

The government had already reduced the GST on fans two years back, by bringing it to 18 percent from 28 percent—the highest slab of the indirect tax.

According to the manufacturers, fans are an essential item and is a mass product, hence GST rate should come further down. The Indian fan market is estimated to be of around Rs 9,000 crore and 70 percent business is in the hands of organised branded players, said IFMA.

The industry is having a year-to-year growth rate of around 7 percent from last 3-4 years. However, it was almost flat between two years 2013 to 2015.

"However, in the premium fans [over Rs 2,500 price], the growth is higher as the people are spending on fan because of rise in disposable income," said IFMA member Rohit Mathur.

Despite economic slowdown the industry has witnessed a growth of 9 per cent so far this year, according to the association. It also expects the momentum to continue led by factors as the revival of real estate sector, construction of low-cost houses by the government, coming infra projects and fairly average monsoon.

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