New GST on Air Conditioners in India: Everything You Need to Know
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.
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New GST Rate on Air Conditioners in India
From 22 September 2025, the GST rate on air conditioners was reduced from 28% to 18%. The revised rate applies to air-conditioning machines falling under HSN 8415.
| Product | GST Rate |
|---|---|
| Air conditioners, including split, window and inverter ACs | 18% |
Product
GST Rate
Alternatives with Lower Energy Use and Low New GST Rates
If you’re looking for efficient cooling options, consider:
| Product Type | New GST Rate |
|---|---|
| Ceiling fans | 18% |
| Air coolers | 18% |
| Inverter-based ACs | 18% (lower power use vs conventional) |
Product Type
New GST Rate
Product Type
New GST Rate
Product Type
New GST Rate
Although ACs are now at 18%, inverter-based models reduce energy bills and long-term operating cost.
Old GST Rate on Air Conditioners
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% |
Product
GST Rate
This rate is uniform across both residential and commercial buyers.
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HSN Code for Air Conditioners
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 |
Product Type
HSN Code
Description
Retailers and manufacturers must use this HSN code when invoicing under GST .
GST Calculation Example
Let’s assume you’re buying a split AC for ₹35,000 (base price).
- Base Price: ₹35,000
- GST @18%: ₹6,300
- Total Invoice Value: ₹35,000 + ₹6,300 = ₹41,300
So, your ₹35,000 AC costs ₹41,300 after GST is applied.
GST on Air Conditioners Reduced to 18%
Air conditioners previously attracted 28% GST. From 22 September 2025, the GST rate on air conditioners has been reduced to 18%.
- Previous GST rate: 28%
- Current GST rate: 18%
- Effective from: 22 September 2025
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* No credit card required
Input Tax Credit (ITC) on ACs
For Businesses:
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:
- You are a GST-registered business
- The AC is used for business operations
- You have a proper tax invoice
For Individuals:
Home users cannot claim ITC, as personal consumption doesn’t qualify under GST rules .
Impact on Consumers
The reduction in GST on air conditioners from 28% to 18% lowers the tax burden on consumers and reduces the overall purchase cost of ACs.
For example, on an AC with a base price of ₹35,000, GST is now ₹6,300 instead of ₹9,800, resulting in a tax saving of ₹3,500.
Cooling Alternatives and GST Rates
If you’re looking for other cooling options, consider:
| Product Type | GST Rate |
|---|---|
| Ceiling fans | 18% |
| Air coolers | 18% |
| Inverter-based ACs | 18% |
Product Type
GST Rate
Product Type
GST Rate
Product Type
GST Rate
Air conditioners, including inverter-based models, are now taxed at 18% GST.
Unique Features of BUSY Accounting Software For the Air Conditioner Industry
- Track AC models by brand, tonnage, star rating, and features with detailed inventory management.
- Manage each AC unit using serial numbers for warranty and service tracking.
- Create job cards for installations, servicing, and repairs with technician assignments.
- Configure seasonal discounts, brand schemes, and bundled offers with ease.
- Define customer-specific pricing and dealer-wise margins or incentives.
- Access actionable reports like model-wise sales.
Final Thoughts
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!
