Number of Brands including online and offline such as ShopClues, Paytm, Bajaj Auto, Ford and others are putting up grand sales to exhaust their stocks before roll out of GST from July 1. Brands are holding heavy discounts before goods and services tax (GST) hits the Indian consumer goods market.
From shoes to cloths, car to bikes, and washing machines to TVs all have a discount tag of late, as retailers try to persuade customers with a pre-GST sale. Most, retailers are trying to reduce intricate legal formalities under the new taxation structure. Under some assessments of the new taxation policy, dealers or retailer may lose up to 40% on excise duty on unsold stocks post GST roll out. The actual on-road prices for low-end cars are likely to reduce slightly or remain constant. However, the discount that are placed by low-end carmakers such as Ford, Maruti Suzuki and Hyundai are between INR 25,000 and INR 75,000. But the deals are expected to be offered by luxury car makers such as BMW and Mercedes-Benz. The former has already announced massive benefit of the GST to the customers, with giving up to 12% discount across its range. After Mercedes-Benz inaugurated its India facility, many of its range are likely to become cheaper by up to 4%, with maximum price benefits reaching around INR 7 Lakh. Reportedly, Audi has also reduced from INR 1.5 lakh to 10 lakh across its range, however it is not seen as move to clear up stocks and has nothing to do with GST as per an online source.
Meanwhile, in the in the online segment, Paytm – on of India’s leading E-commerce company is holding a ‘Pre-GST Sale’ with discount on over 500 brands. The company is offering massive cashback and discounts on an array of consumer electronics goods including mobile phones, refrigerators, laptops, TVs, air conditioners and DSLRs. In order to offload sticks, a number of brick and mortar retailing brands have also put on huge discounts ahead of the new tax regime’s rollout. Reportedly, some of the stores in metropolitan cities of the county are offering discounts of up to 12% on home appliances. Troubles are anticipate while claiming input tax credit, which could lead to losses, especially for retailers who get thier products from free-trade zones. As rising the prices to cover up losses continue to become more risker and ineffective, retailers want to exhaust their inventories as much as possible before 1st June.