refrigerator offer

Dealers Offer Big Discounts To Clear Stock Ahead Of GST

Many retail stores and e-tailers have announced big discounts on electronics, home appliances, clothes, footwear and other items ahead of the implementation of goods and services tax (GST) from July 1. Though such promotional offers are generally announced during the Diwali festive season, some retailers have announced discounts to clear inventories due to the cost and process associated with making old stocks compliant with the new indirect tax regime. The discounts come despite the GST Council increasing input tax credit to 60 per cent from 40 per cent on stocks lying unsold up to June 30.

Besides that, under the incoming GST tax structure, prices of some household consumer goods such as televisions, air conditioners and refrigerators may go up as they fall in the 28 per cent tax slab of 28 per cent. Higher prices could hurt demand initially after the GST rollout.

Meanwhile, leading retailers including Future Group, D-Mart and Aditya Birla Retail discussed in Mumbai on Tuesday issues related to GST, including pricing and margins. Over 12 top retailers met under the aegis of Retailers Association of India (RAI), which intends to approach the government on key areas like including GST as a component in the product price to avoid confusion, and clarification of taxation on packaged commodities.

"The dealers also have to do a compliance under GST transitional provisions for the stock left on 30th June for claiming credit of duties and taxes paid on stock as on that date. To some, this could be a tedious and time-consuming exercise, hence they are minimising the stock," said Sandeep Sehgal, director tax and regulatory at Ashok Maheshwary & Associates LLP.


 

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