GST Wind Brings Discount Rain Before Festive Season

Maruti Suzuki India to Hyundai Motor India and from Amazon to Flipkart, almost every brand is offering discounts to offload inventories before the goods and services tax (GST) roll-out (expected on 1 July). The April quarter which is usually a slow down period due to vacations have become the new festive season for them as well as for the consumers.

Kulwinder Singh, manager at a Blackberrys retail store says, "Usually, we used to register sales of 20-25 lakh in this quarter but this year, it has doubled. I won't like to comment on the roll-out date of GST, but yes, we are offering greater discounts to liquidate stocks. The consumer response has been excellent and it is turning out to be a pretty good quarter."

The reason behind this rain of discounts is the lack of preparedness for GST and fear of higher tax incidence after the new taxation regime comes into play. 

Luxury car brands like BMW, Mercedes-Benz and Audi have announced attractive rates of discounts as they will be taxed under the 28 per cent tax slab after GST roll-out. Makers of televisions, refrigerators, air conditioners and other consumer durables are also offering hefty discounts as they expect their sales to be impacted in July- August as prices would go up 4-5 per cent under the GST regime.

“We offer this sale to offload our stock but it's not because we aren't GST ready, we want GST to roll-out from July 1,” says Sunil Kumar, manager at a Bata retail store. "We are witnessing 20 per cent growth in our sales. We will come up with even better discounts during the festive season," he further added.

The discount spree has brought cheer among consumers. “I was planning to buy a car this Diwali but the discounts going on currently made me change my mind. I have just registered for a hatchback back car and got a discount of 70,000 on it,” says Glory Dwarkesh, who runs a boutique in Delhi.