“Also, with consumers’ tightening their purse string,
post-demonetisation, an increase in price at this time,
would mean a drop in sales. Further, under GST,
companies will be able to avail input tax credit, which
would reduce the tax costs, the benefit of which will be
passed on to the consumers in due course,” observed
Rajat Wahi, partner, management consulting, Deloitte
India.
However, post-GST, companies like Voltas which
manufactures air-conditioners, and other commercial
chilling products, claim to have decreased prices of
air-coolers by 5%-6%.
“Increased availability of input tax credits has enabled
us to cut cost of operations and improve margins. We can
continue to give discounts to consumers, without
compromising on revenue,” explained Pradeep Bakshi,
president and COO, Voltas. However, retailers such as
Vijay Sales and Tata’s Croma point out that, while there
has been a slight increase in prices by a few companies,
many larger firms are still on a wait-and-watch mode.
“On the new stocks, only a few brands such as LG and
Samsung have increased prices by 2%-4% in case of large
appliances. Small kitchen appliances companies including
Bajaj Appliances, have increased prices by 3%-4%,” said
Nilesh Gupta, managing partner, Vijay Sales.
“In cases where the increase in tax has been very steep,
prices have gone up marginally.
For example LG and Samsung have increased prices, as
manufacturers are still trying to find out the actual
impact of the input credit, which would allow them to
decrease prices in the future,” said Avijit Mitra, CEO,
Infiniti Retail, which runs an electronics retail chain
under the brand Croma.
Source:::
Financial Express,
dated 28/07/2017.