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The Goods and Services Tax (GST) is an indirect tax levied on goods and services, including air conditioners (ACs). As per the 2025 GST reforms, air conditioners continue to fall under the highest GST bracket. The GST rate for HSN code 8415 is 28%, applicable to both residential and commercial use.
This classification reflects the government’s position on air conditioners as luxury items. The 28% GST rate has contributed to higher overall costs for consumers, especially when compared with the pre-GST tax structure.
Before GST, taxation on air conditioners was split between excise duty and VAT, typically ranging from 23% to 26%. After the introduction of GST at 28%, costs increased, influencing purchasing trends in the market.
The table below compares the pre-GST and post-GST cost impact on an air conditioner:
Particulars |
Pre-GST (₹) |
Post-GST (₹) |
|---|---|---|
Cost of manufacturing |
₹60,000 |
₹60,000 |
Excise duty at 12.5% |
₹7,500 |
NA |
Cost of production |
₹67,500 |
₹60,000 |
Transportation and other costs |
₹5,000 |
₹5,000 |
Value addition |
₹5,000 |
₹5,000 |
VAT at 14% and GST at 28% |
₹10,850 |
₹19,600 |
Cost of the product |
₹88,350 |
₹89,600 |
Disclaimer: The figures are indicative and for informational purposes only. Actual prices may vary based on manufacturer, state levies, and market conditions.
Harmonised System of Nomenclature (HSN) codes are used globally to classify goods under GST. For air conditioners, the HSN code is 8415, which applies to both residential and commercial models.
This classification ensures uniform application of the 28% GST rate across different types of ACs, whether split, window, or commercial units. By using HSN codes, businesses and consumers can easily identify the correct tax category, simplifying compliance and reducing errors.
Product |
GST Rate (2025) |
|---|---|
Air-conditioning machines, comprising a motor-driven fan and elements for changing temperature and humidity, including those where humidity cannot be separately regulated |
28% |
Residential ACs |
28% |
Commercial ACs |
28% |
Split ACs |
28% |
Window ACs |
28% |
Disclaimer: The GST rates listed above are for reference purposes only and may be subject to change based on government updates or amendments. The list does not cover all products or potential exemptions, and certain items may attract additional Cess. For the most up-to-date and comprehensive information, please refer to the official GST portal
Calculating GST on air conditioners is simple. The tax is applied directly to the base price of the unit.
Example:
If the base price of an air conditioner is ₹50,000, the GST calculation at 28% would be:
GST = ₹50,000 × 28% = ₹14,000
Total Price = ₹50,000 + ₹14,000 = ₹64,000
Base Price = ₹50,000
GST = 28% (₹14,000)
Maximum Retail Price (MRP) = ₹64,000
Note: Discounts are applied on the base price. GST is then calculated on the discounted amount, ensuring that tax is not charged on the pre-discount price.
Businesses registered under GST can claim Input Tax Credit (ITC) on air conditioners if purchased for business use.
To avail ITC:
The air conditioner must be used for business purposes (e.g., office, commercial premises)
The purchase should be recorded as a business asset
A valid GST invoice must be available
By claiming ITC, businesses can offset the GST paid on air conditioners against their output tax liability, thereby reducing the effective cost.
Note: ITC cannot be claimed if the air conditioner is purchased for personal use. Always verify ITC eligibility under the latest GST provisions before filing claims.
The 28% GST rate has placed air conditioners in the highest tax category, making them relatively costlier than other household appliances. This high rate has directly influenced consumer spending patterns, with many buyers postponing purchases or opting for lower-capacity units.
For manufacturers, the uniform GST structure has simplified compliance by replacing multiple state and central levies. However, the higher tax burden has reduced price competitiveness, especially when compared with appliances taxed at 18% or lower.
In the case of imported air conditioners, the GST rate of 28% applies along with additional customs duties, further driving up retail prices. This has encouraged many consumers to prefer domestically manufactured models.
The current GST rate on air conditioners in India, as of 2025 GST reforms, is 28%.
Yes, you can get a GST refund on air conditioners, but only if they are purchased for business purposes and qualify for Input Tax Credit (ITC). This does not apply to air conditioners bought for personal use.
Yes, you can get a GST refund on air conditioners, but only if they are purchased for business purposes and qualify for Input Tax Credit (ITC). This does not apply to air conditioners bought for personal use.
Yes, air conditioner repairs and servicing attract GST under SAC 9987 (specifically the sub-code for electrical household appliances) at an 18% rate.
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