Reduction in GST slabs will not only help the fan industry to invest in capacity expansion but also in the adaption of new technologies, states Indian Fan Manufacturers' Association.
Domestic fan manufacturers have urged the government to bring down the GST to 12% from 18% 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 capacity expansion but also in the adaption of new technologies, stated Indian Fan Manufacturers Association (IFMA).
The association has also asked the Bureau of Energy Efficiency (BEE) to come up with star rating norms for fans, as it is voluntarily adopted by some of the manufacturers at present. “We are requesting the government to bring it down to 12% as it a mass product,” said IFMA Chairman Atul Jain.
The government had already reduced the GST on fans two years back by bringing it to 18% from 28%, the highest slab of indirect tax. According to the manufacturers, fans are an essential item and therefore should be affordable to all. The Indian fan market is estimated to be around Rs 9,000 crore and 70% of the business is in the hands of organised branded players, said IFMA.
The industry has posted a year-to-year growth rate of around 7% from the last 3-4 years. However, it was almost flat from 2013 to 2015. “However, in the premium fans’ category priced at over Rs 2,500, growth is higher as people with higher disposable income tend to spend more on better quality fans,” said IFMA member Rohit Mathur.
Despite the economic slowdown, the industry has witnessed a growth of 9% so far this year. Elaborating about the rating process, Jain said, “Right now the energy efficiency norms are at a 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 is hoping that the GST reduction comes before the mandatory implementation of the energy efficiency norms. Companies will need to hike prices by 20-25 per cent once BEE norms become mandatory for ceiling fans.
The industry expects the growth momentum to continue led by several factors such as the revival of the real estate sector, construction of low-cost houses by the government, upcoming infrastructure projects and a fairly good monsoon.