BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.
Air conditioners (ACs) are no longer just luxury appliances—they’re becoming a necessity in India’s scorching summers. But when buying an AC, have you considered how much tax you’re paying? This blog breaks down the GST (Goods and Services Tax) applicable on air conditioners, explains the HSN code, and highlights how it impacts your final purchase price.
Under GST, air conditioners fall under the highest tax slab of 28%. This rate categorizes ACs as “luxury or sin goods,” placing them in the same bracket as items like cars and high-end electronics.
| Product | GST Rate |
|---|---|
| Air Conditioner (all types: split, window, inverter) | 28% |
This rate is uniform across both residential and commercial buyers.
The HSN (Harmonized System of Nomenclature) code for air conditioners is 8415. This includes machines and appliances for treating air (whether or not they include a means for humidity control or temperature control).
| Product Type | HSN Code | Description |
|---|---|---|
| Air Conditioners | 8415 | Self-contained or split-system AC units |
Retailers and manufacturers must use this HSN code when invoicing under GST.
Let’s assume you’re buying a split AC for ₹35,000 (base price).
So, your ₹35,000 AC actually costs ₹44,800 after GST is applied.
The government considers air conditioners a non-essential, luxury item. Unlike essentials such as food, books, or medicines which fall under lower tax brackets (0–12%), ACs are taxed at 28% to:
If you’re a business buying ACs for commercial use (e.g., offices, stores, hotels), you can claim ITC on the GST paid.
Conditions to claim ITC:
Home users cannot claim ITC, as personal consumption doesn’t qualify under GST rules.
The 28% GST significantly increases the cost of buying an air conditioner. For middle-class families, this can be a big jump in expense, especially considering the base price already includes manufacturing, logistics, and dealer margin.
Many consumers delay purchases or opt for cheaper models to reduce tax liability. This also affects seasonal sales trends in the electronics market.
If you’re looking for energy-efficient cooling options with lower tax rates, consider:
| Product Type | GST Rate |
|---|---|
| Ceiling fans | 18% |
| Air coolers | 18% |
| Inverter-based ACs | 28% (still, lower power use) |
Although ACs are taxed at 28%, inverter-based models reduce energy bills and have a lower long-term operating cost.
While air conditioners offer comfort, the 28% GST adds a significant amount to the final price. Understanding how GST works on appliances like ACs can help you make better financial decisions—whether you’re a homeowner or a business. And if you’re running a commercial space, don’t forget to claim your input credit!
BUSY is a simple, yet powerful GST / VAT compliant Business Accounting Software that has everything you need to grow your business.