Making the best of GST

Discount and sale are two words that can brighten anyone’s day. Sales have become a common occurrence owing to new players entering the market with the same product every other day. Amazon, Myntra and Flipkart offer the same products, more or less. A commodity which seems expensive on Amazon maybe available on Flipkart at a comparatively lower price. Therefore it is quite obvious that to retain customers they have to do much more than catchy jingles and fancy advertisements.

Though the online shoppers are no strangers to these dips in prices, it is a rare occasion when the offline market chalks out bargains off-season. However, ever since the announcement of GST rates for the goods and services, sales have grown exponentially. Vijay Sales is offering to help people save up to 50%. Myntra’s end of season sale and Snapdeal’s ‘Unbox Monsoon Sale’ are rather strategically placed. Also, because electronics such as TVs and other home appliances are set to become slightly more expensive post GST, Amazon is also offering bargains on washing machines and ACs among other things.

 

 

Goods and Services tax is going to bring much needed structure to the Indian economy which will in turn help to map the growth of our markets. The products and services have been classified into distinctive tabs. It was anticipated that some products will be taxed at higher rates compared to the current rates. For instance, house hold electronic appliances which are currently taxed at a rate of around 25-26% will be taxed at 28%. The implications of this are obvious. The sellers will most probably pass on the increased compliance cost to the customers. Consumers will shy away from buying such products immediately after the implementation of GST. The other scenario is such that electronics such as mobile phones and laptops will fall under the 12% slab and will be cheaper. Again, the sellers obviously don’t want to incur losses, so they would want to clear stocks of older models of laptops and mobile phones. Hence, the ‘before-GST’ sales.

 

Another reason why everyone is joining the bandwagon of these bargains is ITC. Businessmen are worried that it will not be possible to claim credit for the existing stock and they are on a spree to clear everything before the midnight of 30th June. This is not the case. Claiming Input tax credit will be a fairly simple process under GST, provided that the necessary conditions are satisfied. One thing that sellers need to note is that credit cannot be claimed for goods that are more than a year old. GST is going to be a permanent change just like demonetization. People fail to realise that just like it took the countrymen some time to adjust to the new currency notes, it will take some time for tax payers to adjust to the new tax regime. The minor disruptions will eventually smooth out and demand and supply chain will go back to how it was.

Despite all this, it seems to be an advantageous time. Just like some products and services will be hard on your wallet, there is no shortage of goods which will be cheaper post 1st July. Apparels, DSLRs, refrigerators and washing machines, small and luxury cars and smartphones are some of the wares which will be affected because of GST. Luckily for us, there are deals being offered for almost all of these.

Team GST Edge advices you to make the best of these sales while they last.