The GST imbroglio is gradually being resolved. Consumer electronics, home appliances, and air conditioners have been categorized in the highest slab of 28 percent. Pre-GST, the tax rate was 23–28 percent, depending on the state. Some brands since July 1 have increased prices by 1–7 percent, while others plan to do so in two phases, one now and one before the festive season, when they can avail input credit, as their existing stock of raw materials and components would be replenished.
The dealer fraternity set for themselves a clear directive, that by June 30, all inventory be cleared, and no stocks be kept when the new regime kicks in, even if it meant offering discounts up to 40 percent. Traditionally, in the month of June, sales are at their lowest, whereas this year it was a month of bumper sales. Some retail counters reported an increase in sales by 80–90 percent over the same period last year. Of course, makers still had finished goods and raw materials lying at warehouses.
The icing on the cake (for the consumers, that is) was that subsequently, after the heavy discounting and hyper activity had taken place, the government issued a clarification that manufacturers and retailers could stamp new prices on their pre-GST stock of goods and sell them till end September.
The provisions under GST, such as lower limit of eligibility for obtaining registration and applicability of reverse charge mechanism from purchase of unregistered trader, will lead to more registered traders and assist in this industry making a sharp move toward a more organized sector. This will further assist in reducing discrepancy between the organized and unorganized segment leading to growth of the industry.
GST will mean simplified business. It will eliminate multiple taxes and their cascading effect. It will save expenses incurred in warehousing and logistics. Seamless movement of goods and a common market across the nation will emerge.
One Tax, One Nation, One Market, is it a pipe dream or will it really bring utopia, remains to be seen!