The Goods and Services Tax (GST) will be rolling out today July 1. However, in the last few days, we have already seen many retailers of white goods and electronics rushing to clear stocks, by offering a range of exciting discounts to potential buyers. The question was what will actually happen after GST is implemented?
While the revised tax rates will be levied on most of the products, the smartphone industry amongst others has been gearing up for the new rates that will be put on the products. In fact, many new buyers had been worried or more confused about the new pricing and tax rates for various products especially smartphones.
Against such backdrop, there might be some good news for the consumers. Well, a report from ET notes that the smartphone pricing will not be impacted even after the GST is implemented. Further, smartphone brands like Samsung, Xiaomi, Oppo, Gionee, Intex and Lava all have reportedly confirmed that "they have plans to absorb the impact from the new tax system that comes into effect" starting July 1.
While this sounds reassuring, the above statement basically means the even with the introduction of GST it will not have a big impact on smartphone pricing along with various consumer-facing sectors.
Coming to what the different brands had to say about the GST's impact. Well, to begin with, Gionee's Managing Director Arvind Vohra has told ET, "There will be no impact on pricing."
As per Industry insiders, Samsung will also most probably not increase the price of its existing phones under GST.
The publication further reports that Xiaomi, Oppo, and Indian handset maker Lava have also stated that they won't be changing their prices after GST implementation. "This is to help consumers purchase the company's products," said Gaurav Nigam, Head of Products at Lava International.
Another report from Business Today notes that Nokia will also keep its smartphone prices the same. As per the company, "the Nokia 6 and the Nokia 5 prices already take into account the GST tax rates. The GST rollout will not affect the prices of the Nokia phone that have been announced so far."
Some smartphone brands are yet to provide a statement.
On the other hand, phones that will be launched and released after the GST rollout may probably see an increment of 4-5 percent, with GST rate fixed at 12 percent. Intex Technologies' Chief Financial Officer Rajeev Jain has said that prices for new models may go up, "but that's a model-specific strategy".
Similarly, iVOOMi's CEO has also said, "We see GST to bring in long-term positive impacts in the smartphone fraternity and the e-commerce zone as well. Though there will be an increase in the prices for a short term causing discomfort to everyone, nonetheless, the far-sighted impact of GST will remain positive for us. With new GST rules, the trade will definitely mature with implementations like - refund of duty, coming into execution, which did not exist in the current GST model."
"The simplicity to trade across geographic boundaries will be catered to more effectively, thereby making it possible for every businessman to follow relatively robust, less cumbersome and seamless system to follow. Hence, to sum it up, iVOOMi sees the later as a positive augmentation to the way trade will take place."