5 Star AC · AC blog · Air conditioner ·Sep 12, 2025

GST Rate Cut on ACs + Voltas Special Offers: How Much Will You Save?

If you have ever waited for the festive months to buy an AC, then this is the right time to do it. With the latest GST rate cuts, you must pay less tax, which means more savings.

For a big-ticket item like an air conditioner, the GST on AC plays an important role in the final bill. The recent revision of the new GST rate on air conditioner purchases changes everything, especially with the festive season around the corner.

In India, consumer sensitivity to upfront cost is high, even in categories where long-term running costs like electricity bills matter. That is why the current GST cut, along with its timing close to the festive shopping cycle, has become a major factor in influencing buying decisions. In this article, we will dive deeper into what these GST rate cuts mean for air conditioners and how you can take advantage of it.

What Is the GST Reduction and Its Immediate Impact?

The notification, effective from 22nd September, revised the air conditioner GST rate downward. This directly lowers the Market Operating Price (MOP) of many models. For categories like ACs, where average ticket sizes are high, such tax cuts have a visible influence: they bring prices down to levels that open the door for more buyers.

To put it into perspective, when the new GST rates list 2025 was rolled out, air conditioners were highlighted as one of the main product segments that would have reduced taxes.

The recent GST rate cut on air conditioners, from 28% to 18% (under 2 tonnes) is not just about lowering prices for individual buyers. It is already reshaping the market in several ways:

Lower prices: With reduced GST, ACs are cheaper by ₹1,500–₹2,500 per unit, depending on the model.
Higher demand: Analysts expect a 9–10% increase in sales volume if brands continue passing the full benefit to customers.
Business impact: AC manufacturers may see a 2–5% rise in earnings estimates over the next two years due to stronger demand.

AC Models Covered Under the New Price Structure

The GST revision covers commonly purchased configurations across split and window air conditioner sale models.

Here’s how it breaks down:

Category	Models Included	Why These Matter	GST Before vs Now
Inverter Split ACs	• 1.5 Tr 3-Star • 1.5 Tr 5-Star • 1 Tr 3-Star	Energy-efficient models that balance electricity savings with upfront cost.	Earlier 28% → Now 18%
Fixed Speed Split AC	• 1.5 Tr 3-Star	A cost-conscious choice for buyers who want affordability in a split AC.	Earlier 28% → Now 18%
Window ACs	• 1.5 Tr 5-Star Inverter • 1.5 Tr 3-Star Fixed Speed	Traditional units, easier to install and maintain, still popular in many cities.	Earlier 28% → Now 18%

These categories of air conditioners cover the most popular air conditioners that are used in India. This means the GST rate cut will make a difference where it matters the most.

What Does the Price Calculation Will Look Like?

Numbers explain this rate cut in the best way. Take an example of a Voltas 1.5 Tr 3-Star Inverter Split AC. Its earlier MRP was about ₹45,000. With the revised GST on air conditioners, the MOP comes down to roughly ₹42,500.

Along with the rate cut, there are additional offers like:

· Cashback of around ₹3,000 (depending on your card).

Exchange value of about ₹3,800 for an older AC price adjustment.
Free installation worth around ₹1,500 plus GST.

The net amount you pay drops close to ₹34,200. That is a difference you will notice immediately on your bill.

Of course, eligibility conditions apply, and cashback varies by bank; exchange depends on the condition of your old AC, and installation services differ across cities. Still, the overall pattern shows how you will save much more than before.

Why This Window Makes Upgrading Practical?

The reduction in GST and the added benefits make big-ticket products like ACs affordable. A buyer who once looked at a 3-Star inverter might now find a 5-Star inverter within reach. That matters because inverter models are efficient and save more on electricity bills.

Here are a few reasons why this is a practical upgrade window:

Bridging the Price Gap:

The difference between a 3-Star and a 5-Star inverter model is narrowed down considerably. What once felt like a stretch now feels achievable.

Energy Savings Over Time:

A 5-Star inverter can reduce electricity consumption by 20–30% compared to entry-level models. Over 5–7 years, this means you will save thousands of rupees, which will be more than covering the extra upfront cost.

Improved Comfort Features:

Higher-star ACs often come with quieter operation, faster cooling, and more precise temperature control. These features improve overall comfort in addition to lowering bills.

Being future ready:

Electricity tariffs are unlikely to go down, and environmental norms will become stringent over time. Owning a higher-efficiency AC today keeps you better prepared for the future.

Together, these points show that the GST cut has made ACs cheaper and gives consumers an option to own higher efficiency models that were earlier out of reach. For many households, this is also the right time to look at the best AC in India category and move to models that bring better long-term value.

Festive Season Window: Limited-Time Offers You Shouldn’t Miss

The timing of the GST reduction has become more relevant for consumers because it landed right on time – India’s festive season. With Dussehra and Diwali around the corner, more people purchase appliances in this period as compared to other months. Here’s how you can benefit from this:

Offer Validity:

Look for the validity of discounts and avail it before it's too late. Many bank-linked cashback programs usually close at the end of the festive sales cycle. Missing these dates can raise your final payable amount.

Stock and Model Availability:

High-demand models such as 1.5 Tr 5-Star inverters tend to sell out quickly in festive sales. Buying early ensures you don’t have to settle for a second choice later.

Exchange Logistics:

Exchange programs depend on service partners and stock flow. Delaying a purchase may mean longer waiting times or reduced trade-in value.

Seasonal Advantage:

Buying in this window also means you get installation and servicing scheduled before the next peak summer demand and avoid seasonal delays.

Cumulative Benefit:

The overlap of GST cut, festive cashbacks, and exchange value creates the highest savings band.

Conclusion

The revision in GST has made air conditioners more affordable at a time when demand is naturally higher. By lowering the air conditioner GST rate, the government has reduced market prices and given buyers immediate relief. For households that once hesitated to invest in premium models, the new GST rate on air conditioner units has shifted affordability brackets, making higher efficiency inverters easier to access.

With Voltas, your savings go even further. In addition to the GST benefit, current Voltas AC offers include up to 48% off, an extra ₹1000 off coupon (use code: EXTRA1000OFF), and up to 10% cashback on eligible transactions. Voltas also runs AC sales such as cashback schemes worth ₹1,500–₹5,000, and exchange benefits up to ₹4,100.

Together, these offers create one of the strongest buying windows in years. If an AC purchase is on your list, the numbers are in your favour - explore the latest deals on Voltas ACs and upgrade before prices shift again.

FAQs

Can I buy AC without GST?

No. Under the Goods and Services Tax system, GST applies to almost all electronic goods, including air conditioners.

What is the GST rate of AC?

As of September 22, 2025, the GST rate on air conditioners in India is 18%, reduced from the earlier 28% slab.

Why is there 28% GST on AC?

Air conditioners were earlier placed in the 28% slab as they are considered luxury items. However, the rate has now been revised to 18% to make them more affordable and to encourage wider adoption.