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Pre-GST Discounts: Why and where?

The D-day in the history of Indian indirect tax regime is less than a week away now and ahead of it, all the business players have started giving mega discounts to clear off their inventory before starting their new innings with GST. Not only the retailers at the physical market but even the e-commerce traders have started giving huge discounts and advertising about their deals through emails, messages and television ads.

What is the reason behind this? Are the Indian business houses celebrating the coming of this new morning? There can be many answers to these questions, depending upon how a person relates business and the new tax regime.

Well there are multiple reasons why companies wish to clear old inventory, let us understand them:

On all accounts, most companies are quaking, fearing the huge increase in compliance costs and paperwork that GST will bring. There are other basic reasons as well like, future price expectancy of goods, compliances that are more stringent, complex tax rules etc.

How a business mind thinks in such a situation?

The business executives keep in mind the future expected prices of their goods when GST comes with its full colors. There can be only two possible conditions i.e. whether the prices will go up or the prices for their goods will fall.

If prices are expected to fall under GST, then they will design a discount in such a way, that even the discounted price is higher than the price under the GST. However, this is just an economic reason to sell the stock.

Another important reason is anti-profiteering. This involves passing of tax benefit to the customers that have taken place due to a reduction in tax rates. Not following these rules can lead to huge penalties and even cancellation of registration.

If prices are expected to go up under GST then, as per the present situation when there is slow economic growth in the economy, a slight change in the prices of goods will defer the purchasing needs of the customers. Therefore, this time comes as a pre-Diwali Mela for all the traders, when they decide to get rid of their old stock.

On a more conscious note, these discounts have triggered, as there is a lack of understanding regarding the position of stock that was present before the GST regime and left unsold.

All business houses wish to avoid any kind of complexities that may arise post-GST and hence wish to earn more premium during this period. For customers, this is party time as there is Discount Monsoon. So enjoy!

Where we can avail these discounts? – Products and discounts

Let us explore some of the products that are at huge discounts:

White goods – electrical home appliances, etc.

Online Market – Great deals

 Offline Stores – Physical Marts

     Automobiles – Cars and bikes

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