The announcement of possible cuts in Goods and Services Tax (GST) has created a strange situation for retailers this festive season. While the news is good for both consumers and companies, it has slowed down sales in both offline shops and online platforms.
Usually, festive shopping begins with Ganesh Chaturthi in Maharashtra and Onam in the south, continuing through Dussehra and Diwali. But this year, people are waiting for official GST rate cuts before making purchases, as prices are expected to drop.
Retailers of cars, consumer goods, and home appliances like TVs, air-conditioners, and dishwashers are facing the heat. Many customers are asking about upcoming price cuts and delaying their purchases. Some have even cancelled car bookings, preferring to wait for lower prices.
The government is considering reducing GST on certain goods:
- Small cars and two-wheelers – from 28% to 18%
- ACs, TVs (above 32 inches), and dishwashers – similar tax cuts are expected
However, companies can only lower prices after the GST Council officially approves the new tax slabs. Until then, buyers are holding back.
Dealers are also under pressure. They stocked up on goods expecting festive demand, but sales are now weak. If these stocks aren’t sold within 60 days, banks will charge higher interest and penalties on inventory loans.
Saharsh Damani, CEO of the Federation of Automotive Dealers Association (FADA), said they have already raised the issue with Commerce Minister Piyush Goyal and Heavy Industries Minister HD Kumaraswamy. Dealers have been assured of support.
Meanwhile, big brands like LG, Samsung, and Sony are also seeing a slowdown in TV sales due to the same reason.
