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There’s relief for those looking to buy smartphones in India. You won’t have to bear any extra cost of the impending rollout of the Goods and Services Tax (GST) on 1 July.
Instead, there’s a discount mela that is being offered by sellers.
Multiple industry experts say that the impact of GST will have a positive effect in the long term, but for now, manufacturers as well as sellers will have to brave the storm for a better future.
However, he was quick to point out that discounts up to 10 percent are in order because dealers will push to clear their inventory.
When quizzed about the impact of GST having on e-commerce players’ strategy, Pathak said that competition will continue to force these companies to offer products at lower prices in order to acquire consumers.
The other curious thing that we bumped into from the GST announcement was the disadvantage that local players have to bear, compared to its global peers.
Currently, the tax slabs are divided into two parts, according to Pathak. Those who are importing pay 12.5 percent tax, exclusive of other duties. And brands which are not importing, they were paying 1 percent tax, he adds.
But from July onwards, the tax slab is universal for everyone, which directly impacts local brands like Micromax, Lava and others. To offset the impact, the Ministry has promised various incentives which are likely to be offered to them in months time, according to Tarun.
But if the incentives don’t come through before July, he indicates that the discounts of 5-10 percent will give way to price hike of mobiles after that.
To put things in perspective, he expects the tax transition to take more than a month, for dealers to understand the impact of the changes that have been announced last week.
(This article has been updated.)
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