New GST on Air Conditioners in India: Everything You Need to Know

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 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.

Alternatives with Lower GST

If you’re looking for energy-efficient cooling options with lower tax rates, consider:

Although ACs are taxed at 28%, inverter-based models reduce energy bills and have a lower long-term operating cost.

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!