Fan manufacturers say fan is basic necessity, demands reduction in GST

Fan manufacturers on Thursday said they have sought a further reduction in goods and services tax (GST) to bring it to 12 percent from 18 percent. They also urged the Centre not to club the product with luxury items.

"The Association has submitted representations to the GST Council to reduce the GST rate on electric fans to 12 percent from the declared rate of 18 percent.

"Initially, the rate was 28 percent. Fans are a basic necessity in a tropical climate like India for people from all strata of the society, living in urban and rural areas and should not be clubbed with air conditioner in the luxury category," Indian Fan Manufacturers Association's Vice Chairman Atul Jain said here on the sidelines of its 18th Annual General Meeting.

Manufacturers had been advised by the GST Council that their representation has been forwarded to the Fitment Committee for their views and reconsideration, he said.

Acknowledging that the government was addressing the teething problems in the roll-out of the indirect tax, the fan makers said difficulties still existed in the filing of online returns.

However, the industry remained bullish on registering growth in sales as well as production.

During 2017-18, the organized manufacturers achieved a consolidated production of 54.44 million fans, registering a growth of 4.19 percent over the previous year while unorganized players produced about 20 million fans.

"In domestic production, our members had clocked 52.30 million fans, registering a growth of 4.38 percent. About two million fans were exported last year," Jain said.

He said the overall production in both organized and unorganized is expected to post about 5 percent growth this year.

With the rising disposable incomes and evolving consumer aspirations along with rural electrification programme, they are expecting a significant growth in the sales of premium, high-end fans. While ceiling fans account for a major chunk of domestic demand, the last couple of years have witnessed a steady increase in the demand for table, pedestal and wall fans.

"The industry, during this fiscal, is expected to grow about 5-6 percent over last year. Sales were higher in the first quarter, over the corresponding period last year," he said.

Ceiling fans still account for 70 percent, Jain said. The demand for energy efficient fans is on the rise and the industry too is focusing on this aspect.

Leading fan manufacturers have been constantly working with the Bureau of Energy Efficiency (BEE), Energy Efficiency Services Ltd (EESL) and Bureau of Indian Standards (BIS) to develop a sustainable roadmap for manufacturing better energy efficient fans, he said.

The Star Labelling programme is expected to not only give an opportunity to all end users to make informed choices at the time of purchase but also result in savings of approximately 30,000 MW of electricity over the next few years, as fans account for nearly 30 percent of the total power consumption, fan makers added.