Find out how GST will Impact your Cost of Owning Consumer Durables

The Goods and Services Tax (GST) was rolled out on July 1, 2017, and is considered one of the biggest tax reforms since India’s independence. The new centralized tax regime will subsume multiple indirect taxes that were previously applicable. This is expected to simplify the tax structure and make the procedure transparent and easier.

GST is expected to impact most products and services. Here is how major consumer durable, electronic products and smartphoneswill be impacted post-GST.

  1. Consumer durables

Products like washing machines, refrigerators, air conditioners, and televisions will see a price increase. The GST rate applicable on various consumer durables is 28%. Before the implementation of the new tax regime, such products were taxed at rates between 25% and 27%. The higher GST rate paid by the manufacturing companies will be passed on to the customers. This will result in an increase of about 1% to 2% in their prices.

  1. Electronic products

If you plan to buy a DSLR camera, laptop, speakers, monitors, or speakers after the implementation of GST; be ready to pay a higher price. These electronic products fall under the 18% GST rate. The higher rate will make these more expensive when compared to their pre-GST prices.

  1. Smartphones

Prior to the roll out of GST, the applicable indirect taxes on smartphones were 13.5%. This rate has now been reduced and falls under the 12% GST slab. Therefore, you will be able to see a marginal reduction in the prices of smartphones. However, the components used to manufacture smartphones also fall within the 12% GST rate bracket. The costs may further reduce if the government provides benefits to manufacturers under the ‘Make in India’ initiative.

However, you do not have to worry about the higher prices after the implementation of GST. You may choose a consumer durable loan (CDL) to buy your desired product. Several banks and non-banking finance companies (NBFCs) offer such loans. Here are three features of these loans.

  1. Wide range of products

CDL is available for wide range of products. Some of these include home appliances like air conditioners, refrigerators, and washing machines. In addition, you may avail of a loan to buy a mobile on EMI (equated monthly installment). The loan is also available for products like cameras, tablets, projectors, home theater systems, and much more.

  1. Eligibility

If you are aged between 21 years and 65 years, you may apply for such a loan. The loan is available irrespective of whether you are salaried or self-employed.. Thus you may finally buy that DSLR on EMI or any other product that you have been wanting by availing of this loan.

  1. Simple and easy

Contrary to common perception, the entire procedure to avail of this loan is simple and easy. You need to provide the lender basic documents, such as KYC Documents, First EMI Cheque and a repayment mandate

The amount available varies so you may choose according to your requirement.Some financial institutions like Capital First have a loan duration of up to two years, which ensures you have no financial difficulties in servicing the borrowed amount.

It is important that you compare the various products provided by different lenders. You must clearly understand the terms and conditions before you decide to buy any products like mobile, camera,or washing machine on EMI. By availing of this loan, you will be able to easily stick to our budget while buying the products that you have always wanted.