GST bonanza: Electronics, lifestyle goods get cheaper

If you have been bitten by the shopping bug, you can’t be blamed. Well, at least, not this year. After all, it is not often that retail stores offer steep discounts in the months of May–June. While monsoon sales by apparel stores usually start by end of June and electronic stores do have some clearance sales in June-July, this year with the Goods and Services Tax (GST) starting from July 1, discounts are bigger than before.

For instance, electronic stores like Vijay Sales, Kohinoor and Digi1 are offering up to 50 per cent off on certain models or till stocks last. Snehanjali, another Mumbai-based electronic chain is advertising its offer as the pre-GST sale with a warning thrown in for good measure that “Prices for most electronic items are set to rise by 5 per cent’’. Electronic manufacturer Samsung is offering free DTH connection with televisions and extended warranty periods and free services with air-conditioners (ACs) and microwaves as part of its ‘June Fest’.

Brands such as Puma, Bata, ONLY, Jack & Jones, Vero Moda, Louis Philippe, Van Heusen, Benetton and US Polo have already begun their sales across major cities.

Retail chains such as Pantaloons, Lifestyle and Shoppers Stop are yet to come out with their formal end-of-season sale, but they have already started giving discounts on select brands in the range of 20-40 per cent.

Then, Flipkart and Shopclues are running their own versions of GST sale. Flipkart Fashion Days will run for nine days, from June 10 to June 18 under which the company would offer products from 50 brands. It will also hold A ‘Bid n Win’ contest for customers during the nine-day sale and the lowest unique bidders will win prizes like Emporio Armani watch worth Rs 13,995, Victorinox bag worth Rs 15,960 and more.

Impact of GST: With the GST on the anvil, retailers are worried that as any stock that they have procured in the last six months will not get the full set-off on the tax already paid when the transition to GST happens on July 1. That is why there is a scrambling to clear off stuff.

Currently, on stocks which are invoiced and delivered to the retailer, the VAT, excise and octroi in some cases have been has been paid. From July 1, if this stock is not cleared, retailers will be stuck with two kinds of stock. Stock on which there are GST invoices from the manufacturer client where the retailer can bill out and effectively claim a set off on GST and stock that is from before GST. On that stock retailer does not have GST invoice. And the effective set off would be only 60 per cent. “Essentially there is a loss on that and that is why retailers are trying to get the old stock out,”Ritesh Ghosal, Chief Marketing Officer, Infiniti Retail which owns Croma. The impact of GST will not be uniform and will vary depending on the region. For instance, in areas that have a lower VAT regime, like Karnataka and UP, prices could go up post GST. While in areas with higher VAT like Gujarat or Mumbai (which also has octroi) there could be softening of prices. “The immediate impact will not be more than 1.5 per cent either way,” he adds.

cashback offers, discounts

In case of apparels, with the input tax credit being made available under GST, prices will go down for cotton apparels below Rs 999 and remain unchanged for apparels above Rs 1,000, says Rakesh Biyani, Joint Managing Director, Future Retail. Apparels have a tax rate of 5 per cent and 12 per cent under GST. “June end-July is when end of season sales are held at stores. With the festive season this month, we are offering 50 per cent cash back on purchases of Rs 2,000,’’ he says.

Older models are being cleared: According to Arvind Singhal, Managing Director, Technopak, a management consulting firm, June and July are among the weakest months in the year for a number of categories. So these sales could be a way for many companies to actually use the pretext of GST and get their slow moving stocks out of the way by giving a discount. “Inventory lying in the pipeline will not be able to get any kind of tax rebate abatement. So, that is one reason why sales are happening. But GST is also a reason for stores to get their slow moving stocks out of the way by giving a discount,’’ he says.

Ghosal adds that the current sales are more clearance sales as stores push out inventory. “Every year, at this time there is a churn that happens. It is end of season and setting up for the new season. May and June is the period when stores flush out old stock,’’ he says. For instance, new television models are launched around August and between the festival season. Similarly, new laptop and computer models are launched in July when schools and colleges start their new terms.

It is likely that the discounts may continue post July, as stores clear their stock to make place for new models. “The festival period begins in September and usually there are not much discounts on the new models which will hit retail outlets by then,” says Singhal.

The discounts going on currently are more of a unit wise discount rather than a category wise discount. The discount depends on the age of the model and the particular store. Largely, they range from 15-25 on most categories. Though in stray cases they could be 70 per cent.

“Essentially the discount is catering to people who are deal seekers and who are happy to settle for older models,” Ghosal says.

 

GST clearance sales: Upto 60 per cent off on clothing, apparel and footwear from top brands

Mumbai, June 15: With the Goods and Services Tax (GST) roll out just two weeks away, several fashion and sports brands are holding clearance and end-of-season sales to sell out current stocks before the new tax regime kicks in. Some of the biggest clothes and footwear brands are offering steep discounts on various products and if you’re an avid shopper, you will want to take advantage of this particular opportunity to save money on premium buys that you won’t regret.

GST is the reason that retailers are hustling to clear stocks before July 1, and shoppers are sure to benefit from this sudden sale season. Some of the major retail chains, online and retail stores, as well as online shopping websites are offering as much as 40 to 50 per cent discount on some of the top clothing, apparel and footwear brands like Puma, Bata, Only, Jack & Jones, Vero Moda, etc. Top online shopping websites like Flipkart, Amazon and others are also holding end of season sales on fashion products, clothes and footwear.

GST

There are heavy discounts on fashion accessories like watches and jewelry, as well as hand bags, and electronics like smartphones, etc. Here are some of the end-of-season-sales that you might want to check out:

1. Puma is offering as much as Rs 6000 off on running shoes, sports shoes, limited edition shoes, and men’s and women’s jackets. You can check out the discounts and offers at the online store of the brand or head to your nearby retail store.

2. Sports retail brand Decathlon is also holding an end of season clearance sale on products ranging from hiking boots and shoes, socks, shirts and trousers, to sunglasses, sports watches, and other sports and camping gear. The discounts and offers of upto 50 per cent are available on there online store as well.

3. Flipkart has announced its biggest ever end-of-season sale that started on June 11 and will go on till June 19. The sale features some of the biggest fashion brands. The Flipkart Fashion Days sale has discounts and offers on not just clothes and footwear, but a range of other products.

4. Shop Clues is also holding its end of season sale with heavy discounts on brands like Liberty, Action in footwear, Globus, Libas, Soch, Folklore and Femella in clothing, and fashion accessories from Lavie and Baggit. Check the website for more information.

5. Jabong is also holding a clearance sale on men’s shirts, t-shirts, trousers, jeans and shorts, as well as women’s kurtis, shirts, tops, trousers and jeans, dresses and other clothing items. The sale features brands like Park Avenue, Wrangler, Levis, United Colors of Benetton, Arrow for men and Global Desi, Vero Moda, Only, Elle and other for women. The discounts are as high as 50 per cent.

6. Aditya Birla’s abof is also holding a clearance sale of clothing and footwear with discounts going up to 60 per cent.

With GST Single-Function Printers to Cost Less but MFPs to Cost More

Printer market in the country is facing a lot of headwinds due to the digital drive in organizations. The government’s move to revise GST rates has brought down the prices of single-function printers but increased the prices of multifunction printers in the country. Earlier the GST Council had set the GST at 28 % on all kinds of printers. But it revised the rates for single function printers lowering the GST to 18%.

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It is believed that the sale of single function printers might go up after this comes in effect. However, it is not so easy to estimate right now, given the fact that the sale of single function printers have been constantly going down for over many years now. However, the new GST regime might further give a blow to multifunction printers. MFPs are the only segment that has gone up. Players such as HP, Canon, Epson, Samsung, Ricoh, Xerox and Panasonic, among others might face headwinds if the prices remain beyond the consumer expectations.

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The 16th meeting of Council led by Finance Minister Arun Jiatley concluded on 11th June where rates of 66 items were revised. The Goods and Services Tax will come into effect by 1st July 2017. Most of the items have been listed under four broad tax slab- 5%, 12%, 18% and 28%.

Items like camera, printed circuits, speakers and monitors, printers (other than multi function printers), electrical transformer, CCTV, optical fiber are priced at 18% tax under GST. This might increase the sales of single functional printers in the country. Although the multi-functional printers will continue to remain expensive. The printer market in India has grown tremendously in the last few years.