New Delhi: Reduction in the Goods and Services Tax for room air conditioners (RAC) is set to lower consumer prices up to Rs 3,000, beyond the anticipated cost increase from new energy efficiency norms, a report said on Thursday.

The GST reduction on sub-2-tonne RACs is likely to bring down prices by approximately 6–8 per cent, translating into a saving of around Rs. 2,000–3,000 per unit, offering significant incentive for buyers, a report from ICRA said.

The GST rate on RACs was slashed from 28 per cent to 18 per cent as part of GST 2.0 reforms. The move could also boost demand later in the financial year, the report added. Meanwhile, the upcoming Star label guidelines, effective from January 2026, aimed at enhancing energy efficiency standards, are expected to raise RAC prices by Rs 50

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