GST on Air Conditioners in India- What Buyers Should Know

With the September 2025 GST rate cut from 28% to 18%, air conditioners—including split ACs—are now more affordable than ever. Whether you are upgrading your old unit or buying your first AC, this price drop makes it the perfect time to invest. From summer comfort to year-round climate control, everyone benefits.

Discover a wide range of air conditioners at any of Bajaj Finserv’s 1.5 lakh partner stores in 4,000 cities in India. Choose your ideal model, pay with Easy EMIs, and enjoy zero down payment on select deals. Take advantage of hassle-free financing with Bajaj Finserv—check your loan eligibility now and bring home your desired AC without worrying about overspending.

Air conditioners were previously placed under the 28% GST slab, which is the highest rate for goods considered luxury items. This meant that whether you were buying a split AC, window AC, or portable model, 28% GST was added to the base price—making them more expensive and often affecting buying decisions for both households and businesses.

However, starting September 2025, the GST Council has reduced the GST rate on air conditioners to 18%, making them significantly more affordable. This change applies to all types of ACs and is expected to lower prices by Rs. 1,500 to Rs. 2,500 depending on the model. With this tax cut, it is a great time to upgrade your cooling system or bring home a new AC without stretching your budget.

The HSN (Harmonised System of Nomenclature) codes are unique identifiers used globally to classify goods under GST. Each type of air conditioner has a specific HSN code that determines its GST rate.

Here is a quick overview of the HSN codes for different types of ACs:

Disclaimer: Each model's features, availability, and pricing are subject to change and may vary. For the most accurate and up-to-date information, please visit the official website.

Before you decide, explore the latest offers. You may find a great deal on a model that matches your needs.

The revised GST rate of 18% is applicable to all types of air conditioners in India. However, understanding the differences between these types can help you make an informed decision based on your budget and requirements.

Here is a breakdown of the GST applicability on various AC models:

• Split ACs: These are the most popular and energy-efficient models, ideal for medium to large rooms.
• Window ACs: Compact and affordable, these are suitable for smaller spaces.
• Portable ACs: Convenient and movable, these are perfect for temporary cooling solutions.
• Commercial ACs: Designed for larger spaces like offices and malls, these units are more expensive and energy-intensive.

The recent GST rate cut on air conditioners—from 28% to 18%, effective September 2025—is already reshaping the market in several key ways:

• Lower prices: With the reduced GST, ACs are now cheaper by Rs. 1,500–Rs. 2,500 per unit, depending on the model.
• Higher demand: Analysts expect a 9–10% increase in sales volume, especially if brands pass on the full benefit to customers.
• Wider reach: More middle-class households and Tier-2/Tier-3 cities are likely to adopt ACs, pushing penetration beyond the current 10%.
• Festive boost: The timing of the cut aligns with the festive season, encouraging more purchases and upgrades.
• Retailer strategy: Brands are adjusting inventory and pricing to avoid overlap with older stock and to maximise consumer offtake.
• Business impact: AC manufacturers may see a 2–5% rise in earnings estimates over the next two years due to increased demand.

You can save even more on your AC purchase by using the Maha Bachat Savings Calculator from Bajaj Finserv. Combine dealer offers, brand offers, and Easy EMI offers to bring down the cost of your purchase. Calculate your extra savings today.

As of September 22, 2025, the GST rate on air conditioners—whether for residential or commercial use—has been uniformly reduced to 18%. Here is a simple breakdown to help you understand how it applies:

For residential use, explore products like a 1-ton ACs that are perfect for small rooms. 

Bringing home your preferred air conditioner is now hassle-free with Bajaj Finserv’s flexible financing options. You can also maximise your savings by using the Maha Bachat Savings Calculator—a smart tool that combines brand offers, dealer offers, and EMI offers, all in one place, helping you lower the overall cost while still paying in small, bite-sized instalments. Follow these steps to get started:

• Explore products on Bajaj Mall: Browse through a wide selection of air conditioners on Bajaj Mall. Compare features to find a model that meets your needs.
• Visit a partner store: Once you shortlist a model, step into any of Bajaj Finserv’s 1.5 lakh partner stores across 4,000 cities in India. See the product in person, talk to experts, and make a confident decision.
• Choose the Easy EMI Loan option: At checkout, select the Bajaj Finserv Easy EMI Loan. Avail financing of up to Rs. 5 lakh and split the cost into convenient monthly instalments. Some products also come with a zero down payment option.
• Check your loan eligibility online: Plan better by checking your loan eligibility in minutes. Simply enter your mobile number and OTP to know your pre-approved limit.
• Use the EMI Network Card for purchases up to Rs. 3 lakh: Already own the Bajaj Finserv EMI Network Card? Use it for instant, paperless checkout and convert your purchases of up to Rs. 3 lakh into Easy EMIs.