GST also known as the Goods and Services Tax will be put into practice in a few days time. As the countdown of its rollout begins, discounts and sales on both online and offline stores have started popping up on large electronic appliances, mobile accessories, apparels and footwear. Retailers are using flash sales to clear their slow-moving inventory with discounts ranging between 10-40 per cent on air-conditioners and discounts as high as 50 per cent on apparels. The reason behind these falsh sales and loads of discounts is that the retailers are trying to clearout their existing stock before July 1 as the they will have lower margins on certain products of the current stock on which the net tax incidence is expected to be higher after GST kicks in.
The recently introduced online marketplace Paytm Mall, this week announced the three days Pre GST Clearance Sale starting from June 13 till June 15. While justifying the Pre-GST Clearance Sale, Paytm Mall in its statement said, “This pre-GST Sale will see customers buy items including televisions, consumer durables, premium laptops and DSLRs at up to Rs 20,000 cashback, while products such as Bluetooth speakers, footwear and accessories will be sold at up to 50 per cent off plus 25 per cent cashback. This sale has come at an opportune time for offline retailers who are looking to offload their entire inventory before the new tax rates become effective.”
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Other brands like Bajaj Auto announced a reduction in price by up to Rs 4,500 on their motorcycles in order to pass on the benefit of the Goods and Svice Tax on to their customers. According to a statement released by Bajaj Auto, Taxes on motorcycles will reduce in most states from July 1, even as benefits for each state and across motorcycle models are different, as quoted in an Indian Express rerport. The post-GST reduced prices have been decided by the company and it will be offered to the customers with effect from June 14.
The retailers and wholesalers who paid value added tax or VAT on their current stock as eligible to receive 100 per cent credit on the VAT that they paid is they produce the receipt of their current stock.