The hike in the excise duty by two percentage points has irked consumer durable firms, which expect to pass on the rate hike to consumers. This will lead to a rise in the price of products such as refrigerators, washing machines and microwave oven, among others.
The excise duty hike offsets the selective customs duty cut on LCD and LED television panels announced in the Budget.
The durable manufacturers said they were still studying the excise duty impact and would soon announce the quantum of price hikes.
“While the raise in income tax exemption should provide some increase in disposable income for consumers, it will be offset by the hike in central excise duty from 10% to 12%,” said Soon Kwon managing director, LG India.
Anirudh Dhoot, president of CEAMA (Consumer Electronics and Appliances Manufacturers Association) said the hike has overshadowed the customs duty cut on LCD and LED panels.
“The budget does not bring any relief to the consumer electronics industry, which has been reeling under the impact of rising input costs and rupee depreciation in recent times,” said Mahesh Krishnan vice president (home appliances) at Samsung India.
Panasonic said the appliance prices could go up 3 to 4%.