This year pre-Budget spirit seems subdued in the market. At present, consumer durables such as televisions, fridges, laptops, washing machines and ACs are not selling like hot cakes. Generally, consumer electronics sales see a surge before the Budget, as buyers rush to make purchases before an expected hike in tax rates.
In the consumer electronics segment, the buzz was missing this year as the goods and services tax (GST) regime has already addressed tax issues. Likewise, in the consumer durables segment, with GST fixed at 28 per cent, firms saw no change in prices post the Budget. On their part, auto dealers have not been offering any pre-budget discounts either, reported the Hindu BusinessLine.
“After GST there is no major expectation around the tax, which we were always apprehensive about,” CP Mukundan Menon, President of Sales & Marketing, Product Business, Blue Star Limited, told the newspaper.
GST subsumes more than a dozen state and central levies into one tax, unifying India into a single market.
In June last year, with the GST set to roll out, markets and malls witnessed a heavy rush of anxious buyers with major electronic and apparel brands offered huge discounts on their products. The discount on various products shot up to about 50 per cent to attract buyers.
“The trend off advertising during pre budget is over now as consumer durables companies will not see any changes in prices post the Budget since GST rates are fixed at 28 per cent for the category. Besides we had already been advertising from Republic Day till the end of this month and there is no need to make any additional investment now, Vijay Babu, Business Head, Airconditioner, LG India, told the Hindu BusinessLine.
Commenting on the lack of pre-budget discounts on cars this year, Shridhar V, Partner at Grant Thornton India, said: “Earlier there used to be excise duty, VAT and other levies. That helped manufacturers offer discounts. The auto sector has already gone through a revision after the initial GST rate announcement. So, there is no expectation of prices going up post the Budget.