Migration to GST implementation caused discomfort among their trade partners: Durables Makers
Migration to GST implementation caused discomfort among their trade partners: Durables Makers

Consumer durables makers said that they expect the market to take at least 2-3 months to normalise operations post the implementation of Goods and Services Tax from July 1.

They said that the run up to GST implementation has caused discomfort among their trade partners who are busy clearing old stock to avoid losses before the new indirect tax regime kicks in next month.

Ajay Seth, Head, Channel operations, Panasonic India, told PTI, "GST has caused a sense of discomfort amongst the traders as they are worried over the cash flow that might occur during GST implementation therefore, consumer-centric offers are being introduced."

According to Kamal Nandi, Business Head and Executive Vice President, Godrej Appliances, "If distributors were to carry forward stocks to the GST regime from VAT regime, they would lose around 3-4 per cent margin."

He added, "Right now they are liquidating their stock. If they do not have any stock, they are purchasing it. They are not upstocking anything."

According to the Consumer Electronics and Appliances Manufacturers Association (CEAMA), the situation could take up to three months to normalise after the implementation of GST.

Manish Sharma, President, CEMA, said, "Business will be normalised over the next two-three months of operations."

Nandi ruled out any panic in the market saying informed decisions and planned strategies are being executed, and companies are supporting their dealer partners.

He added, "We have given some sell out schemes to reduce stocks and they (trade partners) would purchase from July 1."

C M Singh, COO, Videocon, said that traders are focusing on liquidating their stocks.

He added, "In order to help out traders in the given situation, we are extending the excise paid bills."

Under the GST regime, most of the home appliances and consumer durables will attract 28 per cent levy barring some items such as air coolers which are under the 18 per cent bracket.

 
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