GST: Stage all set for new tax regime

The 'pre-GST sale' has surprising offers, with certain brands offering up to 70 percent discount.

Published: 30th June 2017 02:34 AM  |   Last Updated: 30th June 2017 09:01 AM   |  A+A-

By Express News Service

HYDERABAD: With new Goods and Services Tax (GST) regime to begin in a day, e-commerce websites have been showering discounts on customers. The pre-GST sale as they are calling it, has surprising offers, with certain brands offering up to 70 per cent discount. While it is an advantage for customers who can now purchase their favourite products at slashed prices, GST experts point that this is just another gimmick to increase sales within a limited time frame. 

“Any retailer would want to have zero stock left in his inventory before GST system rolls out. To begin with, they are cashing in on customer sentiment where anything festive or eventful will work wonders. So, this is a good opportunity to sell more in less time,” said Santosh Dalvi, Partner, indirect tax, Klynveld Main Goerdeler (KPMG) India. 

This works in sync with the input tax credit which is the core concept of GST system where the retailers, in this case, are eligible to claim input credit for tax paid on their purchases. “They cannot claim input credit on tax they paid on those goods purchased before the implementation of GST,” said Piyush Kumar, CEO of Taxmann Technologies, which recently launched One Solution, an integrated software for various tax services, including GST. 

Price rise expected
Another aspect attached to this mad rush of sales is that certain sectors need not pay increased tax rate on goods that they have purchased before July 1. Prices of televisions, air conditioners and refrigerators will be increasing by five per cent. “This means that they have to pay increased tax on goods purchased before July 1 after GST rolls out. So, they want to clear it,” Malvi said.


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