Missed Amazon, Flipkart, Snapdeal’s summer sale? Don’t worry, smartphone retailers are expected to once again offer fancy discounts on smartphones, before Goods and Services Tax (GST) regime sets in.

 

While there is no word of any kind of sale from other retailers, smartphone sellers are keen to sell off their old/existing stock to welcome the gloom of GST.

 

Analysts say that while some handset brands may offer discounts directly to consumers, via online and offline modes, retailers are also likely to offer price cuts to reduce unsold inventory, according to Economics Times.

 

"June will be dry in terms of sell-throughs (sales to customers) and if price increase happens in July, discounts may be offered by brands starting mid-June till the month end, such that the old stock is cleared before models with increased prices start coming in," said Navkendar Singh, senior analyst at International Data Corporation (IDC) India to Economics Times.

 

Tarun Pathak, associate director at Hong-Kong based Counterpoint Research said, "We can expect discounts of 5-10% towards June-end by retailers because even they would not want to hold on to stock which may become expensive in a couple of weeks".

 

Why are retailers anxious?

 

The GST Council last week finalised 18 per cent tax on services rendered by telecom operators against 15 per cent at present, which will lead to a rise in handset prices.

 

Once GST kicks in, the 18 per cent tax on services by telecom operators will translate into Rs 3 increase on a Rs 100 recharge or a monthly rental.

 

According to PTI, Mobile industry body COAI Director General Rajan S Mathews expressed disappointment with the GST rate announced for telecom.

 

"We had submitted to the government that consideration must be given to the present financial condition of the sector and any rate beyond the existing rate of 15 per cent makes the telecom services more expensive for the consumer," he said.

 

What should ou buy before GST is unrolled?

 

Amazon’s sale was from May 11-14, while Flipkart’s was from May 14-18. But if you missed it, here is what you can buy before July 1:

 

TVs, refrigerators and ACs:

 

Don’t delay in buying consumer durables like TVs, refrigerators and ACs before GST is implemented. The council has earmarked, 28 per cent rate for the products.

 

According to Nandi, the industry was expecting a lower tax slab of 18 per cent on TV, AC and refrigerator as they now are no more luxury items.

 

"We were expecting 18 per cent tax slab for home appliances because is a necessity now and not a luxury. Home appliances is a very low penetrated category, so bringing it down to 18 per cent would have propelled growth of the industry," he added.

 

Jewellery

 

If you are planning to buy jewellery, it will be advisable to buy it before the GST regime comes into place. This is because, currently, only a 2% effective tax passed on to the consumer but once the GST model is in place, at least 6% effective tax rates could be imposed, impacting your jewellery buys.

 

Insurance, banking

 

For the middle class, an immediate impact of GST would be the higher premium outgo due to the increase in rate of tax on insurance following implementation of the Goods and Services Tax. For families that own a car and pay for health and term insurance the increase in annual outgo would be close to Rs 1,000.

 

Availing banking services, investing in mutual funds and paying mobile bills will get costlier with the GST Council setting a rate of 18 per cent for telecom and financial services.

 

E-Commerce

 

In you are a regular online shopper, then you are likely to witness a huge hole in your pocket after July 1. Ordering clothes, shoes and accessories online will get marginally expensive as the Council announced a 1 percent rate on companies such as Flipkart and Amazon. Currently, online transaction are non-taxable.

 

Movie Tickets

 

Watching a movie will be far more expensive under the GST regime as the tax incidence will increase from the 8-10 percent entertainment tax that the industry currently has to pay.

Medicines

The pharmaceutical industry was hoping the goods and services tax (GST) rate on life-saving drugs would be zero, even as it has been capped at 5 per cent and that of all other formulations at 12 per cent. The rates in the GST regime will be slightly higher than what prevail now. In the GST regime, essential drugs that treat malaria, HIV-AIDS, tuberculosis, and diabetes fall in the 5 per cent bracket. Almost all other drugs are in the 12 per cent net.