Consider, the cut of the excise duty on ACs from 24% to 16% announced in the budget, for instance. The relief has come a little too late, industry players say. For, about 95% of the country’s total AC making has moved to tax havens like Jammu, HP, Uttaranchal and others since last year owing to high tax slabs.

Room ACs up to 3-ton capacity as well as packaged ACs were till now subject to 24% excise duty, consisting of 16% BED and 8% SED. The former was levied on all appliances while the latter applied only to ACs. “No player is going to shift their manufacturing back, neither is consumer going to benefit from this move,” Electrolux India managing director Rajeev Karwal said.

The positive side of the reduction of excise duty coupled with the benefit of reduction in customs duty from 20% to 15%, however, is that it will drive import of high end split-ACs. This could translate in a price reduction of 2% to 4% in ACs which could be passed on to consumer.

“Imports of high-end lifestyle enhancing products such as plasma TVs, split air conditioners, hobs and hoods, microwaves should go up,” says an analyst.

Voltas’ KJ Jawa, however, feels that the move is encouraging and will drive AC industry growth from the current 20% to 35%. Echoing the same sentiment, Mirc Electronics managing director Gul Mirchandani said that prices of Onida ACs will be reduced by about Rs 1,200.

Reduction of peak import duty by 5% will help in rationalisation of costs and will bring some cheer to the CTV category. While prices of colour picture tubes will be reduced by 5% to 10% as inverted duty structure on CPTs has been corrected, consequently, the prices of CTVs will also come down.