GST effect: LED bulbs become cheaper

New Delhi, Oct 18: The Indirect tax on energy efficient appliance has been reduced substantially due to the implementation of Goods and Services Tax (GST). Indeed, a boon for end-consumer, especially, middle-class people in India.

The prices of energy efficient appliances distributed under the Government of India's Unnat Jeevan by Affordable LEDs and Appliances for All (UJALA) scheme have been revised, owing to the rollout of the Goods and Services Tax (GST).

The 9W LED bulbs are priced Rs 70 which was Rs 310 prior to GST. A 20W LED tube light will cost Rs 220 and 5-star rated fans will be available at Rs 1,200 only. After prices were revised, the Union Government appealed consumers not to pay any amount over and above the prices fixed by EESL for the UJALA appliances.

Total 7.5 Crore households have been covered underUjala scheme. As on Oct 18, 2018, 31,03,69,218 LEDs have been distributed.

The UJALA scheme was launched by the Narendra Modi government on January 5, 2015 with a target of replacing 77 crore inefficient bulbs with Energy Efficient LED Bulbs. The distribution of LED has led to annual energy savings of more than 3,244 crore kWh and resulting in avoidance of over 6,525 MW of peak demand.

The estimated cumulative cost reduction in bills of consumers, per year is INR 12,963 crores and has also helped in reduction of 2.62 crore tonnes of CO2 per annum.

Goods and Services Tax (GST) is an indirect tax levied in on the supply of goods and services. GST is levied at every step in the production process, but is meant to be refunded to all parties in the various stages of production other than the final consumer. Goods and services are divided into five tax slabs for collection of tax - 0%, 5%, 12%,18% and 28%. However, Petroleum products, alcoholic drinks, electricity,are not taxed under GST and instead are taxed separately by the individual state governments, as per the previous tax regime.