New Delhi: Domestic fan manufacturers have urged the government to bring down the GST to 12 per cent from 18 per cent 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 in the capacity expansion but also in the adaption of new technologies, said Indian Fan Manufacturers' Association (IFMA).
The association has also asked the Bureau of Energy Efficiency (BEE) 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 per cent as it a mass product. We believe that fan industry can serve its customers better if this slab could come down from 18 per cent to 12 per cent," 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 per cent from 28 per cent, the highest slab of the indirect tax.
Read more:Hike in GST rates on caffeinated drinks would have minimal impact: Varun Beverages
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 per cent business is in the hands of organised branded players, said IFMA.
The industry is having a year-to-year growth rate of around 7 per cent 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.
On rating process, Jain said, "Right now the energy efficiency norms are at voluntary stage. There is a notification from the government to make it mandatory from July next year. IFMA is in discussions with BEE to come up with its star rating for fans".
The industry has witnessed 9 per cent growth this year so far and expects the momentum to continue led by factors as revival of real estate sector, construction of low cost houses by the government, coming infra projects and fairly average monsoon.
