People planning to purchase white goods will have to shell out more money from Saturday as most appliances and durable makers have increased their prices in the new tax regime under GST.
According to a PTI report: Durable makers would also go for another hike before the festive seasons as the industry is considering a price revision based on input credit, when their existing stock of raw materials and components would replenish.
“For our sector, the net tax would go up. The current tax rate is around 25-27 per cent and would go to 28 per cent. Therefore, immediately the consumer price, which is market operating price, would go up if brand and dealers want to retain the same margin,” Business Head and Executive Vice-President, Godrej Appliances, Kamal Nandi told PTI.
Videocon COO C M Singh echoed similar views.
Although trade partners and dealers have exhausted their stocks by showering discounts up to 50 per cent, makers still have finished and raw materials lying at warehouses and would take two-three months to avail the tax credit and bring it at pre-GST level.
“Once we start getting input credit from the freshly purchased raw material, which would happen down the line in two months, then we would have price at the same level as pre GST days,” Singh was quoted by PTI as saying.
Companies are getting their price list reviewed and from Monday onwards, dealers would start restocking based on GST prices.
“By Monday or Tuesday we expect price list of all brands to be out and then business would start. Our trade partners have already liquidated their stocks and would start buying,” Nandi told PTI.
However, company as Panasonic would take a decision in this regard next week only.
“It would be not from tomorrow, hopefully we will review the need by early next week,” Director Sales and Service, Panasonic India, Ajay Seth told PTI.
Moreover, the makers are not expecting a huge spike in sales in the beginning. “It would be a gradual offtake,” Nandi told PTI.
Over price review before the festive season, Singh was quoted by PTI as saying: “This is bound to happen because people are waiting for a price correction as there has been an impact of 2-3 per cent because of GST…they have to do it in order to sustain.”
According to Nandi, the industry would go for a price correction again possibly in September, depending on the input tax credit and commodity price.
Festive season starts from Dussehra and goes till Diwali and during that period durable makers account up to 35 per cent of their sales.