Retailers attempt to woo customers with a pre-GST sale, hence it’s raining discounts as we fast approach the July 1st rollout date. AC’s, cars, clothes, shoes, washing machines, other home appliances and more, everything comes at a discounted rate these days.
Retailers want to offload their stocks, as it will reduce legal formalities that are a part and parcel of this new tax regime.
Rules under GST suggest that if the duty paying document is available with a dealer, they can take full credit of taxes paid on goods in stocks after July 1st. Usually, dealers are not issued an exercise invoice when they buy from distributors. A credit of 60% excise duty is paid on the product, according to the norms. This means dealers will lose 40% excise duty on stocks that remain unsold after GST is rolled out.
ALSO READ: Nitish Kumar urges UP CM not to enter Bihar; check out…
The automobile industry especially luxury cars has been affected by the GST. From July 1, effective on-road prices for small cars are expected to either go down marginally or remain constant. As of now companies such as Maruti Suzuki, Ford, Hyundai are offering discounts anywhere between Rs 25,000 to Rs 75,000 in order to clear their inventory. However, the best discounts are being offered on luxury cars. BMW was the first to pass the benefit of GST to the customers, bringing down prices up to 12%. Even the Mercedes-Benz’s Made in India range became cheaper by upto 4%, the maximum price benefit for the customer being Rs 7 lakh.
Online Shopping site Paytm is also holding a ‘PRE-GST SALE’ with over 6,000 retailers across 500 brands. Customers can avail discounts, cashback on a range of products from laptops, mobiles to DSLR’s and footwears.
ALSO READ: AAP slapped with Rs 27 lakh fine by PWD
Several brick and mortar sellers have also reduced prices to dispose of merchandise ahead of the new tax regime’s launch.
Sanjay Jetly, owner of several home appliances shops in Noida was heard saying, “My stores in Delhi-NCR are offering 10-20% discount on home appliances. There will be trouble in claiming input tax credit and there is a big loss for retailers who get products from free-trade zones. It is very difficult to pass on the burden of higher costs to customers, these days.”