6/14/2017 electronic products: GST brings Diwali early as retailers offer upto 40 per cent discount - The Economic

er cent discount - The Economic Times

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GSTbringsDiwaliearlyasretailers
offerupto40percentdiscount
BYSAGARMALVIYA&WRITANKARMUKHERJEE,ETBUREAU|UPDATED:JUN06, PostaComment
2017,12.27PMIST

KOLKATA/MUMBAI:Forshoppersof
whitegoods,thesingeingsummerhas
broughtacoolDiwaligift.Costlyhome
appliancesarenowavailableat2040
percentdiscounts,aselectronicgoods
retailersrushtocleartheiroldinventories
aheadoftheJuly1rolloutofthegoods
andservicestax(GST)andminimize
theirlosses.

Televisionsets,refrigerators,air ThediscountsareavailableevenaftertheGST
conditionersandwashingmachinesnow Councilincreasedexcisecreditto60percentfrom
40percentonthetransitionalstockduringitslast
havetheirpricetagsslashed.Discounts
meetingonJune3.
vary,dependingonthelifeoftheold
stockandthecostprice:Retailerssay
SPOTLIGHT theywouldmakealossofabout6per CompanySummary NSE BSE

PoliticalCorner centonunsoldstockpurchasedbefore
TelcoTalks
Videocon 1.30(4.99%)
May,andabout14percentonone
yearoldinventories,againstwhichinput
GenerateEnquiriesforyourBusinessbyListing
creditscannotbeavailed. onEconomictimes.com

ListYourBusiness FindServiceNearYou
Thediscountsareavailableevenafter
theGSTCouncilincreasedexcisecreditto60percentfrom40percentonthe
transitionalstockduringitslastmeetingonJune3.

CongressstonewallsAAPbid
tojoinOppositioncamp
CongressdubsAAPaBteamofBJPand
apoliticaloffshootofRSSmobilisedanti
corruptionmovementanddoesnotwantto
throwalifelinetoAAP.
NDAtonamepresidentcandidateby
June23
AmidOppositionbuildup,RahulGandhi
decidestotravelabroad
http://economictimes.indiatimes.com/industry/cons-products/electronics/gst-bring-diwali-earlier-as-retailers-offer-upto-40-per-cent-discount/articleshow/5900837 1/4
Theusualdiscountofferedbytheretailersisaround1015percentonmaximumretail
price(MRP)anditwillnowsignificantlygoupaboutthreefold.
Jiobrokeyourbizorwasit
somethingelse?MrMittal?
EvenbrandssuchasSamsung,Panasonic,HitachiandVideocon BSE4.84% have
Mommywillwipethebillionaires'tears,but
withasmall,wethandkerchief.
comeupwithconsumerpromotionaloffersgiftsandextendedwarrantiestoboost
salessinceretailersanddistributorshavestoppedpickingupstocktocleartheexisting
inventory,twoseniorindustryexecutivessaid.
"It'salmostamidyearDiwaliforconsumersinJune,asmostretailerswillbedolingout
hugediscountstoclearinventorybeforeGSTisrolledout.Retailerswanttoliquidate
theirentirestockastheycannotbeartheloadoftheremaining40percentcentralGST
6/14/2017 electronic products: GST brings Diwali early as retailers offer upto 40 per cent discount - The Economic Times
whichwillnotbecreditedtothemonunsoldinventory,"saidPulkitBaid,directorat
GreatEastern,whichisoneofthelargestwhitegoodsretailersintheEast.

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VijaySalesmanagingdirectorNileshGuptasaideveryretailerwouldwanttohavethe
minimumstockbyJuly."Whileweareclearingstockondiscounts,wearealsolosing
moneytodoso.It'saonetimepainandJulysaleswillbehitbadlyduetoanearly
discountingthisyear,"hesaid.

Accordingtoindustryexecutives,someofthelargeconsumerelectronicretailchains
aresaddledwitholdinventoryofmorethanRs100croreeach.Thesewouldmakea
bigdentontheirmargins,sincethewhitegoodsmakershavecomeupwith
compensationschemesforunsoldstockpurchasedonlyinMayandJune.

Theoldinventorywouldalsoincludeproductsthatareondisplayontheshopfloor,
sinceseveralofthemtendtobeayearoldandeventuallysoldtocustomers.Asenior
executivewithaleadingconsumerelectronicschainsaidthecompanyiseven
sacrificingmarginstoclearoutstock.

Pricesofconsumerelectronicsaresettogoupby35percentafterGSTdueto
increaseintaxation.Mumbai'sleadingelectronicsretailchain,Kohinoor,isoffering
nearly40percentdiscountsongoodskeptondisplay."Mostofthegoodsondiscount
especiallycellphonesandLEDTVsareendofthelifemodelsandwearetreatingthem
asastockclearance.Forothergoods,theoffersareasignofdesperation,"said
directorVishalMewani.

TheGSTCouncil,initslastmeetingSaturday,agreedtoincreasedeemedcreditto60
percentforproductsintheGSTslabof18percentandmore.Whitegoods,
televisions,kitchenappliancesandsmallappliancesfallunderthe28percentGST

http://economictimes.indiatimes.com/industry/cons-products/electronics/gst-bring-diwali-earlier-as-retailers-offer-upto-40-per-cent-discount/articleshow/5900837 2/4
6/14/2017 electronic products: GST brings Diwali early as retailers offer upto 40 per cent discount - The Economic Times
slab.

TheCouncilalsoproposedallowing100percentcreditincaseofhighvalueitems
pricedaboveRs25,000basedonthetrackingoftheproduct,evenwithoutdocuments
detailingtheactualpaymentofexciseduty.However,theindustryawaitsclarificationon
thedefinitionoftrackingandwhetherit'sontheMRP,baseprice,ormarketoperating
price.

GodrejAppliancesbusinessheadKamalNandisaidiftheindustrycanavailbenefitof
100percentcredit,around25percentofthestockwillbecovered,andthebalance75
percentmustbeliquidatedbytrade."Hence,thediscountwillcontinueattheretail
end,"hesaid.

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http://economictimes.indiatimes.com/industry/cons-products/electronics/gst-bring-diwali-earlier-as-retailers-offer-upto-40-per-cent-discount/articleshow/5900837 4/4