E-Retailers Clear Smartphone Inventories Via Pre-GST Sales

by CXOtoday News Desk    Jun 19, 2017

smartphone

This is the right time for consumers to get new smartphones, tablets and mobile accessories like smartwatches as online marketplace like Amazon and Flipkart will give several discounts on these products till month end to clear inventories sourced from states with lower tax than the proposed 12% GST that will be implemented from July, reports ET.

Once GST comes into effect, there will be no tax differential between states. Amazon is putting up smartphones on sales from June 19-21 and would continue till the stock is cleared and Flipkart will do the same as well, the report mentioned three senior industry executives as saying.

Paytm is giving smartphone deals from sometime. The deal includes popular handsets such as iPhones which were billed extensively to trade from Andhra Pradesh, Karnataka, Tamil Nadu, Kerala and Telangana where Value added tax on smartphones is the lowest at 5%.

Cities in the South such as Hyderabad and Bengaluru, given lower VAT, has become the sourcing hub for online sellers. They would sell on their platforms across India where average VAT on smartphones is 14%.

“However, since average VAT on smartphones was 14%, net impact on bottom line will be positive for brands at end of the year,” ET quoted a senior industry executive with a top handset maker as saying.

Rahul Sharma, Micromax co-founder said that GST will balance up offline and online market taxation and will be a proper step, the report mentioned. “However, due to the mid-year change of taxation policy, we stand committed behind sales and distribution partners and to ensure they are not treated unfairly in the changing regime, the company is proposing compensation to partners affected by the change,” he added.