As the Goods and Services Tax is about to get implemented on July 01, many companies and online retail stores are offering huge Pre-GST discounts on goods that may get impacted after GST roll out. Here is a brief detail on this.
Why is Pre-GST Discount?
Pre-GST discount has been offered by many leading online retail stores to sell off their stocks as the GST is about to get implemented on July 01. The discount offer is huge and can impress any buyer. This is happening amid the rates declared by the GST council where rates of electronics have seen immense curve. It is expected that there will be a dip in purchase of electronic appliances that fall in 28% tax slab therefore they are clearing their stock by offering huge discounts.
PayTM, Amazon, Flipkart and many Online retail stores have offered discounts
PayTM in its latest announcement has announced a three day sale from June 13, 2017 on electronics and other items. This mega Mall will host 6000 retailers across 500 brands with cash back up to 20, 000 rupees. There is also 20%-50% cash back on small electronic devices like Bluetooth.
Last week Amazon and FlipKart had offered the same discount on their sale which is expected to take place during Diwali. In the end of March, motorcycle companies too had offered huge discount of BS-3 engine motorcycles after the order of Supreme Court and these discounts attracted huge sale. Similar approach has been made by these companies especially those of electronics to clean their old stocks.
In the Offline Stores:
Big brands such as Zara, Marks, Spencer have jumped into this Pre-GST sale apart from Lifestyle and Shoppers Stop. Apart from electronics, fashion items like clothing, footwear and other such items have also seen huge tax change. Readymade garments above 1000 will attract 12% tax while below it will attract 5% tax. Footwear above 500 will attract 18% tax slab while below 500 will attract 5% tax. The MD of Woodland said that our average footwear costs 2000 rupees therefore with such a slab it won’t do any good to us or the customers.
Why so Hurry?
It is also expected that as the GST will commence, it will take few months time to properly fit into the market framework and this can lead to slow production, slow transportation and low sale that is why most companies want to sale as much as they can. The items covered are Smartphone, Computers, Laptops, TV, Refrigerator, microwave, trimmer, washing machine and many more.
Smart phones are covered in 12% tax slab giving some relief for customers as the present rate is 13.5% while the other appliance mentioned above are covered in 28% tax slab which will make them costlier. Companies with such goods, whose rate will fall after GST rollout and whose rate will rise after rollout, both are giving discounts as one fears that the fall of rate after July 01 will push them to sale costly products in cheap rates while cheap products won’t attract much buyers after the rates go high.