GST on Washing Machines: Tax Rates, Impact and Compliance

Does GST rates on washing machines vary depending on the type? Is it different for fully automatic or the ones with a centrifugal dryer? Both consumers as well as new sellers come across such dilemmas. This article explores Indian washing machine GST rate and its impact on the final price and Input Tax Credit (ITC) benefits. 

GST Rates on Washing Machine 

The HSN code for washing machines is 8450. By the use of this code, businesses can easily categorise washing machines for taxation purposes in compliance with the GST regulations in India. Products under HSN 8450 fall into the 18% taxation category according to the GST law. The code applies to automatic and semi-automatic washing machines and all other machine types. Washing machines of different types receive extra digits to their HSN code in order to represent their distinct type. Additional details are available in the provided table.  

Impact of Current GST Rate on Washing Machine 

Let’s compare the pre and post-GST impact on washing machines through various metrics. 

Uniform tax rate: Post-GST, a standard 18% GST rate is applicable on washing machines instead of varying based on state-specific VAT, CST, and excise duty 

Reduced cascading of taxes: There is no more cascading of taxes (tax on tax) to reduce the total tax burden on manufacturers. 

Pricing stability: Due to a uniform GST, there are fewer pricing fluctuations, benefiting both manufacturers and consumers alike. 

GST on Washing Machine Accessories and Services

The new GST framework promotes consistency across different accessories and services of washing machines in India. For instance, all essential accessories, spare parts and add-ons for washing machines attract the same 18% GST. That includes hoses, filters, motors, or any other additional component. 

Similarly, the GST rate is the same as 18% for installation, repair and maintenance services of any type of washing machine. This uniformity helps consumers to purchase and maintain their washing machines at lower prices than before. 

GST Input Tax Credit for Business 

GST allows for the input tax credit for manufacturers. That means manufacturers can claim tax paid on the raw materials used for manufacturing the washing machine as input tax credit (ITC). Businesses purchasing washing machines for commercial purposes (equivalent to raw material) can also claim ITC. However, for that, they must be registered under GST. Businesses must file GST returns on time using forms GSTR-1 and GSTR-3B to declare outward supplies and report a summary of the same and claim ITC for the relevant tax period.