BY
SAGAR MALVIYA
&
WRITANKAR MUKHERJEE
, ET BUREAU
KOLKATA/MUMBAI: For shoppers of white goods, the singeing summer has brought a cool Diwali gift. Costly home appliances are now available at 20-40 per cent discounts, as electronic-goods retailers rush to clear their old inventories ahead of the July 1 rollout of the goods and services tax (GST) and minimize their losses.
Television-sets, refrigerators, air-conditioners and washing machines now have their price tags slashed. Discounts vary depending on the life of the old stock and the cost price: Retailers say they would make a loss of about 6 per cent on unsold stock purchased before May, and about 14 per cent on one-yea rold inventories, against which input credits cannot be availed.
The discounts are available even after the GST Council increased excise credit to 60 per cent from 40 per cent on the transitional stock during its last meeting on June 3.
The usual discount offered by the retailers is around 10-15 per cent on maximum retail price (MRP) and it will now significantly go up -about three-fold.
Even brands such as Samsung, Panasonic, Hitachi and Videocon have come up with consumer promotional offers - gifts and extended warranties - to boost sales since retailers and distributors have stopped picking up stock to clear the existing inventory, two senior industry executives said.
"It's almost a mid-year Diwali for consumers in June, as most retailers will be doling out huge discounts to clear inventory before GST is rolled out. Retailers want to liquidate their entire stock as they cannot bear the load of the remaining 40 per cent central GST which will not be credited to them on unsold inventory," said Pulkit Baid, director at Great Eastern, which is one of the largest white goods retailers in the East.
Vijay Sales managing director Nilesh Gupta said every retailer would want to have the minimum stock by July. "While we are clearing stock on discounts, we are also losing money to do so. It's a onetime pain and July sales will be hit badly due to an early discounting this year," he said.
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