Those who are looking to purchase the television, air-conditioner, washing machine, refrigerator or any of the electronic appliances, then hurry up and purchase it now. The reason behind that electronic retailer or e-commerce website is offering heavy discounts and promotional schemes to clear their available stock before the execution of GST Regime.
The electronics industry has started clearing their available stock to get ready for the GST implementation. Due to the GST Regime, it is expected that the electronics industry might have to bear the losses in sales. According to reports, it is disclosed that they will be stocking minimum inventory before 1st July.
In last the GST Council meeting, members have modified the excise credit from 40 per cent to 60 per cent. Generally, the discount provided by the retailers is nearly 10-15 percent of maximum retail price (MRP) of electronic appliances and now it will enhance up- -about three-fold.
Several famous companies such as Panasonic, Samsung, Hitachi and Videocon is also offering promotional schemes like coupons, gifts and extended warranties on white goods to boost the sales of the retailer. According to two senior executives, retailers and distributors have stopped purchasing new stock and trying to clear the available stock.
The Retailers are offering 20-40 per cent discounts on electronic appliances which include, television, refrigerator, air- conditioner to reduce their losses and destocking, before rolling out Goods and Services Tax (GST) i.e., 1st July.
In the views of Pulkit Baid, Director at Great Eastern, a renowned electronic retailers of the east, "It's almost a mid-year Diwali for consumers in June, as most retailers will be doling out huge discounts to clear inventory before GST is rolled out. Retailers want to liquidate their entire stock as they cannot bear the load of the remaining 40 per cent central GST which will not be credited to them on unsold inventory,"
“As retailers are focusing on reducing their inventory, they have already started running promotional schemes to drive sales. Depending on the product category, we are running discounts in the range of 5 to 50 percent,” said Nilesh Gupta, the Managing Partner of Mumbai-based electronics chain Vijay Sales.
It is expected that the prices of consumer electronic appliances are increased by 3-5 percent after the rolling out of GST due to increase in taxation. Kohinoor is one of the leading retail outlets in Mumbai which is offering 40 percent discounts on electronic appliances. Vishal Mewani, the Director of Kohinoor Retail Chain, said “ "Most of the goods on discount especially cell phones and LED TVs are the end of the life models and we are treating them as a stock clearance. For other goods, the offers are a sign of desperation.”
Last week in the GST Council meeting has provided some relaxation. It enhances the input tax credit to 60 per cent for goods or products fall in the slab rate of 18 per cent. Under the new indirect taxation structure, white goods, kitchen appliances, and small appliances are fall in the category of 28 percent slab rate.
The proposed rules of GST Council will permit electronic- goods retailers and auto- companies to utilize input tax credit on the stock, now they are focusing to clear the existing stock with dealers and start- up with a fresh under GST.
The business head and Vice President of Godrej Appliances, Kamal Nandi, said, “ “We are focusing on giving our trade partners sell-out support so that they can reduce their inventories by this month-end.”
CM Singh, COO, Videocon, said the announcement made by the GST Council in the last meeting has made clarification among distributors and will be increasing trade sentiment. Now the dealers are totally focusing on clearing the existing inventory.