Big discounts on ACs, cars, phones to beat deadline
RETAILERS WANT TO MINIMISE COMPLEX LEGAL FORMALITIES RELATED TO CLAIMING INPUT CREDIT
It is raining discounts as we approach the July 1 rollout date for the Goods and Services Tax (GST). Cars, ACs, TVs, washing machines, shoes, clothes everything has a discount tag these days, as retailers woo customers with a pre-GST sale.
Retailers want to offload their stocks to minimise complex legal formalities related to carrying over and claiming input credit under the new tax regime.
Rules under GST suggest that if the duty paying document is available with a dealer, he can take full credit of taxes paid on goods in stocks after July 1. Typically, a dealer is not issued an excise invoice when he buys from a distributor.
Now, in such a case, the norms allow a credit of 60% excise duty paid on the product. This means dealers will lose 40% excise duty on stocks that remain unsold after GST in rolled out.
From July 1, the effective on-road prices for small cars are expected to go down marginally or remain constant. But smallcar makers such as Maruti Suzuki, Ford and Hyundai are offering discounts anywhere between ₹25,000 to ₹75,000 to clear their June inventory.
But the most attractive discounts are on luxury cars. BMW was the first to pass on the benefit of the GST to the customers, bringing down prices across its range by up to 12%. Soon Mercedes-Benz’s Made in India range also became cheaper by up to 4%, the maximum price benefit for the customer being ₹7 lakh.
Audi too slashed prices across its range from ₹1.5 lakh to ₹10 lakh, though clarifying that it’s not a June stock clearance.
It’s bonanza for customers on online shopping sites. Paytm Mall is holding a ‘Pre-GST Sale’, hosting over 6,000 retailers across 500 brands. Through this, consumers can get discounts and cashback on a range of product categories, such as TVs, laptops, mobile phones, air conditioners, refrigerators, DSLRs and footwear. Several brick and mortar retailers have also slashed prices to dispose of merchandise ahead of the new tax regime’s launch, advancing their end-of-season sales by a month.
“My stores in Delhi-NCR are offering 10-20% discount on home appliances. There will be trouble in claiming input tax credit and there is a big loss for retailers who get products from free-trade zones. It is very difficult to pass on the burden of higher costs to customers, these days,” said Sanjay Jetly, owner of several home appliances shops in Noida.