As the Indian government is gearing to set up the Goods and Services Tax (GST) mechanism in India, it’s raining discounts on various e-commerce sites. GST is an indirect tax that aims at replacing the central and the state Government tax and bring the goods under a unified tax bracket. While the GST will increase the cost of some of the services and goods, it is also expected to bring down the cost of others.
The analysts have been predicting discounts of up to 40% across various product range and the same is expected to be available across both offline and online retail channels. As reported by Trak.in, WS Retail and the Cloudtail, the most prominent retailers across Flipkart and Amazon respectively have confirmed that they will be offloading their inventory before July 1st. Automobile manufacturers have already come in the open and are offering huge discounts across certain car segments.
Why the Discount?
Well, for all of the retailers who deal in goods worth more than Rs 25,000 can avail a tax credit of 100% adjusted against the excise duty that is already paid on the items. However, most of the retailers are complaining that the products that they sell cost less than Rs 25,000 and furthermore they are also not in the possession of the serial number.
If the goods are sold after the GST comes into effect, the retailers will essentially be paying double tax. This is ironic since the very purpose of GST was to cancel out tax slabs at different levels. Also claiming the tax input credit for small items seems more like a cumbersome exercise, not to mention the fact that the processing of the tax return will take some time. Yet another clause that dents the retailer’s prospects of getting an input credit is the need for an invoice serial number via which the Excise payments will be tracked. However when I Spoke to a few mid-sized retailers who dealt with consumer electronics they claimed to have maintained the invoice serial numbers and would prefer to claim the tax credit instead of selling the goods at a loss.
However when I Spoke to a few mid-sized retailers who dealt with consumer electronics they claimed to have maintained the invoice serial numbers and would prefer to claim the tax credit instead of selling the goods at a loss. But again it might not be a case with all the retailers.
Which categories command a maximum discount?
To be frank, despite the claims of significant discounts by analysts, I was only able to find a limited number of deals which were heavily discounted. In fact, when we tried reaching out to the local retailers (in Bengaluru and other Tier II cities in Karnataka), the stores denied the knowledge of such discounts and quoted the usual MRP price. It’s quite likely that they might offer discounted products in the near future as we near the end of this month.
Online, most of the categories including Apparels, Footwear, electronic accessories, luxury watch brands, camera and camera accessories, health and beauty products should be getting some discounts. That being said, the percentage of discount is on the MRP and not the best price. Since most of the consumer electronics products were already selling at the best price, the added discount is marginal.
How to search for products that are discounted due to GST?
We do have a handful of price graphs including PriceHatke that let you keep a tab on your favourite product. One can also use other sites that curate the online deals. I, for instance, have been using Paisaless to monitor the prices and also check out the best deals in every category. Additionally, one can also set up price drop alerts and get the same in your inbox. That being said the smartphones are not discounted heavily.
Did you spot a great deal online? Let us know in the comment section below