Leading retailers including Future Group, Trent Hypercity, DMart and Aditya Birla Retail today met in Mumbai to discuss issues related to the Goods and Services Tax (GST), including pricing and margins. Over 12 top retailers met under the aegis of Retailers Association of India (RAI), which intends to approach the government on key areas like including GST as a component in the product price to avoid confusion, and clarification of taxation on packaged commodities. “Currently, GST will appear as a separate component in the customer’s bill. Some products may be exempt from GST and in such an event a separate bill has to be raised,” said Kumar Rajagopalan, chief executive officer of RAI.
Retailers also expressed concern about 5 per cent tax levied on packaged goods that causes a discrepancy as loosely sold commodities are not taxed. “Ideally, taxes should not cause price increase. They should not create variations that adversely affect consumers,” Kishore Biyani, CEO of Future Group said. The common objective of all retailers is also that margins should be protected while ensuring that prices do not increase. “We will reduce prices by 2-20 per cent for various consumer products,” Biyani added.
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There will still be a month or two before the labelling comes in. Jamshed Daboo, MD of Trent Hypercity, agreed that July onwards all retailers would aggressively reduce prices. While reiterating that they are expecting July 1 roll-out of GST, he also said retailers have configured their IT systems and are aligning with FMCG partners. “All retailers are in talks individually with FMCG companies to ensure that their margins are retained, while ensuring lower prices to consumers,” he said.
Another issue that RAI will put forth is about service tax on delivery charges. Rajagopalan pointed out that retailers who currently deliver on their own or through marketplaces will incur service tax. It is expected that when multiple items are delivered, the item which incurs highest tax will be considered for computation of service tax. “We require clarification on that,” he said.