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GST on AC after September 2025: 18% rate, installation, geysers and heat pumps
GST on room air conditioners fell from 28% to 18% on 22 September 2025. How that shows on your invoice, plus GST on installation, AMC, geysers and solar water heaters.
GST on room air conditioners (HSN 8415) is 18% from 22 September 2025, down from 28%. The change was part of the rate rationalisation announced after the 56th GST Council meeting in September 2025, often called "GST 2.0", which moved most goods into two main slabs of 5% and 18%. The same notice listed dishwashers and televisions among consumer electronics moved from 28% to 18%, and moved solar water heaters and systems from 12% to 5%. Electric water heaters and AC installation or repair services are generally billed at 18%; check the HSN or SAC code and rate printed on your invoice.
Part of the AC and geyser price factors overview. This is general information, not tax advice.
What changed on 22 September 2025
| Item | Before 22 Sept 2025 | From 22 Sept 2025 |
|---|---|---|
| Air-conditioning machines (HSN 8415), including split and window room ACs | 28% | 18% |
| Household dishwashing machines (8422) | 28% | 18% |
| Solar water heater and system (8419 12) | 12% | 5% |
Source: the GST Council press release on the 56th meeting's recommendations, which lists these items and the 22 September 2025 date. The rate notifications that gave legal effect to the changes are on the CBIC GST portal.
Compensation cess, which applied to some luxury goods, did not apply to room ACs, so the headline change for ACs is the 10-percentage-point cut in GST.
How much difference does it make? (illustrative)
Take an AC whose price before GST is ₹35,000:
| At 28% | At 18% | |
|---|---|---|
| Taxable value | ₹35,000 | ₹35,000 |
| GST | ₹9,800 | ₹6,300 |
| Price with GST | ₹44,800 | ₹41,300 |
The difference is ₹3,500, about 7.8% of the old GST-inclusive price. Whether the shelf price dropped by exactly this amount depends on the brand and seller passing on the cut. Prices are set by sellers, not by the GST rate alone, and MRP labels on old stock may have been revised with stickers or new labels as permitted by Legal Metrology rules.
Reading your AC invoice
A proper tax invoice from a GST-registered seller shows:
- Seller's name, address and GSTIN
- HSN code for the product (8415 for ACs) and SAC for any service such as installation
- Taxable value, rate and amount of tax: CGST + SGST (9% + 9%) for a sale within your state, or IGST 18% for an inter-state online sale
- Invoice number and date
Within a state, 18% shows as 9% CGST + 9% SGST. If your invoice for an AC bought after 22 September 2025 shows 14% + 14%, ask the seller to explain.
GST on installation, AMC and repairs
| Service | Usual treatment |
|---|---|
| Installation billed separately by the brand or installer | Service with GST, generally 18% |
| Extra copper pipe, stand and materials billed with installation | Usually billed as part of the installation service, or as goods with their own rates |
| AMC (annual maintenance contract) | Service, generally 18% |
| Repair visit and spare parts | Labour as service; parts as goods at their rates |
A small local technician who is not registered for GST (below the registration threshold) cannot charge GST at all. A composition dealer cannot collect GST from you and issues a bill of supply. If someone adds "GST" to a handwritten bill without a GSTIN, ask for a proper invoice.
Water heaters and heat pumps
- Electric storage and instant water heaters (HSN 8516) are generally billed at 18%; they were not part of the September 2025 changes for 28% goods.
- Solar water heaters and systems moved to 5% from 22 September 2025, which narrows the price gap with electric geysers.
- Heat-pump water heaters may be classified differently depending on design. Check the HSN code and rate on the quotation; if unclear, ask the seller which entry they apply.
How each type compares beyond tax is covered in water heater types, and the effect of the price gap on payback in the heat-pump water heater payback guide. For ACs, tax is one part of the price; split, window and inverter types differ far more.
Can a business claim input tax credit on an AC?
A GST-registered business that buys an AC for its office can generally claim input tax credit, subject to the conditions in the CGST Act, unless the AC becomes part of immovable property in a way that blocks credit, or is used for personal or exempt purposes. A household cannot claim credit. If you run a business from home, ask a chartered accountant.
EMI and GST
When you buy on a card EMI, GST is charged on the AC price at the time of sale. Banks then usually charge GST on the interest and processing fee of the EMI, separately. This is a cost of financing, not of the AC. The EMI calculator lets you include it in the fee.
FAQ
Did the GST cut apply to ACs already in stock?
The rate depends on the date of supply. A sale invoiced on or after 22 September 2025 is taxed at the new rate even if the unit was made earlier.
Is GST on an AC compressor or spare part also 18%?
Parts have their own HSN entries and rates. Check the invoice; many parts of ACs fall under the same chapter, but do not assume.
Is window AC GST different from split AC GST?
No. Both are air-conditioning machines under HSN 8415 and are at 18% from 22 September 2025.
Sources
- GST Council — press release on the 56th meeting recommendations and rate schedules
- CBIC GST — rate notifications and CGST Act text
- Department of Consumer Affairs — Legal Metrology rules on MRP
- National Consumer Helpline — if a seller refuses a proper invoice or overcharges
