GST rate cut: Refrigerators, washing machines, kitchen appliances to be cheaper from today

GST rate cut: Refrigerators, washing machines, kitchen appliances to be cheaper from today

Consumer appliances like refrigerators, washing machines, small screen TVs, vacuum cleaners and sundry kitchen essentials will now cost 7-8 per cent less, as companies prepare to pass on the benefits of the recent GST revisions. Last week the Modi government had announced the biggest GST rate cut since last November and slashed the levy on several white goods and commonly used kitchen appliances like mixer-grinders and juicers by 10 per cent – from the highest tax bracket of 28 per cent to 18 per cent. The new rate comes into effect today.

According to The Economic Times, with this development, the total taxation amount on several consumer electronic products is now lower than what it was during the earlier VAT regime, when it stood at around 26.5 per cent. Better still, industry insiders claim that prices will come down to nearly a two-year low.

“With the revision of GST rate on refrigerators and washing machines, there will be a reduction of price to the tune of 7-8 per cent for the end consumer. Godrej will pass on the entire benefit of GST reduction to the consumers,” said Godrej Appliances Business Head and Executive Vice President Kamal Nandi, adding that the rate cut will provide relief to the appliances industry.

“The revision will make refrigerators and washing machines more affordable which will accelerate the penetration of these appliances across India. This, in turn, will lead to a spur in demand which will lead to increase in production and, hence, have a positive impact on the GDP,” he explained.

Korean consumer durable majors LG has likewise committed to pass on the full benefit of the GST rate cut to the consumers. Citing sources in the know the daily added that the company has dropped prices by 8-9 per cent, while Samsung and Godrej will be reducing prices by more than 7.81 per cent across all products that got a tax cut. Panasonic’s net price cut is between 7-8 per cent.

The price cuts vary because some companies have passed on the complete benefit of the tax cut while keeping dealer prices intact but some brands have also reduced the dealer price, thus increasing the net price cut. The tax component is calculated on dealer price to arrive at the product’s maximum retail prices.

So LG has revised the price of its 335-litre frost-free refrigerator price from Rs 46,490 to Rs 42,840 – a price drop of 8.5 per cent – and a 6.2 kg top load washing machine is now 8.7 per cent cheaper at Rs 18,390. On the other hand, a Godrej 190-litre direct cool refrigerator is now priced 7.8 per cent lower at Rs 15,257, against Rs 16,550 earlier.

Godrej Appliances business head Kamal Nandi told the daily that for the stock already in trade, the manufacturers will supply new pricing labels to the retailers mentioning the new MRP, which they will stick on the product packaging. So if you are going shopping for one of the products that recently enjoyed a tax cut, check for reduced prices before you pay up.

The industry is optimistic that the tax cut will fuel demand and provide a new impetus for growth, especially ahead of the upcoming festive season. The Indian consumer, after all, has largely been holding back on discretionary spending since demonetisation in November 2016.

“The goods to benefit the most will be washing machines and refrigerators, where we expect growth to pick up substantially. The reduced taxes in television sets of up to 26 inches will ensure increased penetration and affordability in smaller parts of the country. We plan to pass on the complete benefits translating to around 7-8 per cent,” said Manish Sharma, president and CEO, Panasonic India and South Asia and President, CEAMA.

However, if you are planning to buy a larger-sized LED TV – 32 inches or more – you’d best do so in a hurry. Because the buzz is that their prices will go up next month.
[“source=indiatoday]

GST To Curb Black Money, April 2017 Roll-Out Tough: Experts

GST To Curb Black Money, April 2017 Roll-Out Tough: Experts
New Delhi: The Goods and Services Tax (GST) regime will weed out black money and usher in an efficient taxation system, but the April 2017 roll-out deadline appears to be challenging, experts said.

“GST will be the biggest reform since 1991 which will make India an attractive destination for foreign investments. Manufacturing will get more competitive due to the emergence of a national market as against the present fragmented one.”

“The low tax to GDP ratio of the country will go up, helping the government to adhere to fiscal discipline and keep inflation in check. It will improve productivity and transparency,” Hinduja Group chairman Ashok P Hinduja said.

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The passage of the GST Constitutional Amendment Bill is a “milestone in the history of India’s economic reforms” and makes the country competitive, especially in manufacturing, in the global market, said Sachin Menon, partner and head-indirect tax at KPMG in India.

The Rajya Sabha on Wednesday gave its approval to the long-pending GST Bill as the government brokered a consensus with other political parties to get the reform legislation passed.

The April 1, 2017 roll-out deadline for the new indirect tax regime looks tough but both the states and Centre are ready in terms of preparedness, experts said.

“In terms of the affirmation and righteous intent on GST to be implemented in the country, possibility of its implementation from April 1, 2017 would be arduous, if not impossible,” said Nangia & Co managing partner Rakesh Nangia.

According to PwC (India) partner-indirect tax Anita Rastogi, both the Centre and states are on the right path for GST implementation with broad modalities in place.

“Technically, April 2017 can happen. It looks tough but not impossible. Implementing from June or July would be easier as GST is a transaction tax,” she said.

The Centre has already put up in public domain the model GST law, the rules for business processes and refunds.

“An April 2017 deadline would therefore be challenging. Realistically, the date may be closer to July or October 2017,” said Rohit Jain, partner, Economic Laws Practice.

After the passage of the GST Constitutional Amendment Bill by the Lok Sabha and the President’s assent, the GST Council will be set up. Parallely, 50 per cent of the state assemblies or at least 15 states will have to ratify the bill.

Following that, the Central GST (CGST) legislation is expected in Parliament in the winter session and the state GST (SGST) will have to be passed by respective state assemblies.

Also, the GST Network (GSTN) that will form the IT backbone for the entire levy would have to be evolved.

“The information technology preparedness for GST roll-out is very good. The GST rules are being drafted and also the final list of luxury goods and exempt goods are to be notified,” Mr Rastogi said.

KPMG’s Mr Menon further said, “As every transaction needs to be mandatorily reported in the GST network, which tracks all reported transaction from source till consumption, it will be difficult to generate black money in a chain of transactions. In that sense, GST is the real black money law.”

Experts further said GDP growth would be positively impacted.

“With GST law becoming an Act, businesses too will have to begin their process of GST preparedness as soon as possible to ensure full optimisation of this opportunity. Businesses need to be given sufficient time to be GST ready (such as adapting their IT systems, invoicing mechanisms etc),” said Mr Nangia.

Mr Hinduja added, “Elimination of tax cascading is expected to place the economy in the growth trajectory of 8 per cent and above with the seamless flow of goods and services.”

“GST rate above the range of 18-22 per cent will be regressive. Clarity is needed on the continuance of existing exemptions especially those linked to investment made both at the centre and state levels.”

 

[“source-ndtv”]

‘Travel May Be Costlier In Short-Term Due To GST’

'Travel May Be Costlier In Short-Term Due To GST'

HIGHLIGHTS

  1. Consumers may have to pay more for travel and holidays after GST
  2. In long-run they will benefit from removal of duplication of taxes
  3. Supplies of hotels and restaurants, will be subjected to a single tax
New Delhi: Consumers may have to pay more for travel and holidays in the short-term when GST is implemented, but in the long-run they will benefit following removal of duplication of tax incidences on hotels and airlines, according to travel service providers.

“From a customer perspective, in the short-term there may be a possibility of rates going up, subject to what rates, including exemptions/abatements, will be finally decided by the GST Council,” Cox & Kings CFO Anil Khandelwal told PTI.

He, however, added: “The customer will certainly benefit in the medium-term to long-term as duplication of tax incidence from Hotels/Airlines to tour packages will be minimised and setoff of taxes paid is passed on through the supply chain up to the actual consumer.”

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Thomas Cook (India) Ltd Chief Operating Officer Mahesh Iyer said under GST regime, it is expected that supplies of hotels and restaurants, a major cost component of tour services, will be subjected to a single tax, resulting in fungibility, reduction in the cascading effect of taxes and hence increased cost efficiencies to benefit travellers.

“However, for this benefit to play out effectively, it is necessary that all the B2B supplies are made fully creditable and the credit flow is seamless across the states. This aspect will probably require some deliberations,” he added.

Yatra.com President Sharat Dhall said the government will need to make an exception for airline sector as “the current service tax ranges from 5.6 per cent to 9 per cent of the base fare, which is considerably less than the GST rate that is being spoken about, of 15-18 per cent.”

MakeMyTrip Chief Financial Officer Mohit Kabra said in order to avoid any undue compliance burden there needs to be a provision for single registration, return and assessment as in Service Tax instead of state wise registrations as envisaged in the GST draft.

National Restaurants Association of India President Riyaaz Amlani regretted that the liquor has been left out of the ambit of GST. “Exempting it (liquor) defeats the very purpose of bringing in a uniformed single tax structure. This allows states to have their own taxes without a cap with separate accounting requirements and results in double compliance for the restaurant industry. This is neither beneficial for Ease of Doing Business nor for the customers,” he said.

(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)

[“source-ndtv”]