GST Rate Cut Boosts AC, TV And Home Appliance Sales During Navratri
The new two-slab GST structure of 5 per cent and 18 per cent has replaced the earlier four-rate duty regime following GST Council's sweeping reform aimed at boosting consumption across the country.
As lower GST rates take effect on Monday, sales of air-conditioners, TV sets surged dramatically with buyers rushing to grab cheaper deals offered by retailers at the beginning of the Navratra festival.
Neighbourhood kirana stores also witnessed a modest rise in sales of daily essentials as well as food items.
The new two-slab GST (goods and services tax) structure of 5 per cent and 18 per cent has replaced the earlier four-rate duty regime following GST Council's sweeping reform aimed at boosting consumption across the country.
This led to price cuts of most of the common-use items ranging from foods, toiletries and cosmetics to white goods such as TV and air-conditioners from Monday, which also coincides with the beginning of the nine-day annual Navratra festival.
Dealers of home appliance segment said room-air conditioning (RAC), which has come under 18 per cent tax rate from 28 per cent earlier, witnessed almost double sales on the very first day.
"Trends of primary regular sales are encouraging. Till 5 pm in the evening, our dealers have reported almost double sales, compared to any other Monday," Haier India President N S Satish told PTI.
However, he added that Monday being a weekday, purchases were expected after office hours. The company had started pre-booking even before roll-out of revised GST rates.
Blue Star Managing Director B Thiagarajan said: "Going by the enquiries, I think the mood is upbeat." "Rough estimate is that growth compared with September last year will be around 20 per cent. E-commerce players' big sale begins today and the prices will be watched by many consumers before deciding to buy. Many dealers of ours have bought machines under 'Shub Aarambh- New Muhoort' sentiments today," he said.
Avneet Singh Marwah, CEO of Super Plastronics Pvt Ltd (SPPL), a TV manufacturing company having licences of several global brands including Thomson, Kodak, Blaupunkt, said sales went up by 30 to 35 per cent on the first day of GST 2.0. The company sells TV through e-commerce platform flipkart.
"Sales of TV sets with 43 inch screen size and 55 inch, on which GST levy was reduced, have a growth of 30 to 35 per cent," he said.
At some shops of daily essentials and food items, confusion persisted on the revised MRPs and people were seen arguing with shopkeepers over the reduced prices.
Several companies are yet to collect data of the first day sales and will have a final update on Tuesday.
Until Monday, sales of home appliances were almost stalled as buyers started delaying purchases awaiting the nation-wide implementation date of new GST rates.
Buoyed by the initial response, appliance makers as well as dealers expect a high double-digit sales growth during this festive season spanning from Navratra to Diwali.
Sales during this period usually contribute around one-third of the overall annual sales value across categories.
Price of daily essential and food products have also come down from Monday, as FMCG companies have slashed prices, extending the GST benefits to the consumer.
The companies operating in the fast-moving consumer goods space have come up with revised MRPs (maximum retail prices) of their products, including soap, shampoo, baby diaper, toothpaste, razor, and after-shave lotions.
Parle Products Vice President Mayank Shah said today a good sales happened at the distributor level as the channel was empty.
"Now this will percolate down to retailers and consumers," he said.
About primary sales at retailers' end, he said it's still too early to comment on it. However, he said by the end of this week, there would be an improvement in buying in those channels also as the festive time reaches.
Shah also said confusion on prices and GST would also be cleared within a few days and that would lead to improved buying.
(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)
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