As retailers across industries are gearing hard to prepare themselves with the GST roll-out, those wanting to make big consumer durable purchases have a reason to cheer and thanks GST.
Massive discounts are on offer on large consumer appliances, ranging from ACs, refrigerator, TVs, washing machines, microwaves and other home and kitchen appliances. The discounts are kept in view of the clearance of the old inventory and the rates have been decided basis the cost of the product and the life of the clearance stock.
The step is in line with an attempt to minimize losses before the GST gets rolling from July 1. Furthermore, already dealers have come up with figures in respect of loss due to old inventories on which they shall not be able to avail the benefit of input tax credit.
The discount in line with the less time left for the roll-out of the reformatory tax-regime shall even increase to three-folds as per sources aware of the development. And as more and more, retailers are backing away from selling old inventory, companies on their own to boost sales with sales promotional offers. Leading brands are known to come with discount offers including Hitachi, Samsung, Panasonic and Videocon.
Ahead of the GST roll-out white goods manufacturing companies introduced compensation schemes only in May and June this year for the left inventory. This is likely to impact large retail chains adversely impacting their margins considerably who are already bundled with huge inventories of Rs. 1 crore. rSo to clear year old inventories, companies are doing away with their margins and offering high discounts.
Godrej Appliances business head Kamal Nandi said if the industry can avail benefit of 100 per cent credit, around 25 per cent of the stock will be covered, and the balance 75 per cent must be liquidated by trade. "Hence, the discount will continue at the retail end," he said.
These goods post GST shall be expensive by 3-5% as all goods under the category would attract a tax rate of 28%.