GST is about to be implemented and this has cause severe turbulence in electronic market as well. Products that have been manufactured pre GST rollout needs to be sold before the GST rollout to avoid major loss. The companies are offering major discounts as the new GST rates would lead to increase/decrease in cost of production.
GST Rates Impact on your Entertainment
Electronics carry major electrical goods like Smartphone, laptops, AC, TV, Microwave, Bikes, Cars, Cameras, Speakers and many other electronic services. Except small cars and Smart Phones, rest all other electronic commodities will become expensive after GST rollout whether little or much depending upon the tax slab. SmartPhones are categorized in 12% tax slab which will make it cheaper as the present rate is 13.5%.
TV, Refrigerator, Microwaves, Laptops, Cameras, Speakers, Trimmers, Washing Machines, Toasters and other such electronic appliance are set to be costlier from July 01 as 28% tax will be levied on them. The bikes too will become costlier as 28% tax will be levied on them. The small cars will be little cheaper but midsized cars will be little costlier due to 15% cess and SUV and luxury cars will be little cheaper as with 28% tax and 15% cess it will only be 43% tax whereas presently it is around 45-55%.
The services of electronic items will be mixed. Transportation will be cheaper when it comes to private taxis, railways, bus fares, economy class flights and other general services as they will attract 5% GST whereas business class tickets will attract 12% GST and they will be costlier. Communication tariffs will be costlier as present rate is 14.5% while the GST rate will be 18%. Movies will be cheaper as the present entertainment tax is upto 45% (depends on states) but the GST rates will be 28%.
Traders Confused on GST Implementation:
The electronic companies are now giving huge discounts on electronic items to clear old stocks. The bulk dealers may not become GST compliant because the link and nexus is quite complex and implementing it will require time. The electronic industry may suffer initial loss as products that are manufactured at higher rate may be cheaper after July 01, 2017.