People go midnight shopping to avail discount sales as GST kicks in
As India stepped into the GST regime, people go midnight shopping to beat possible price rise and check out how the new tax slabs workindia Updated: Jul 01, 2017 13:52 IST
At the stroke of midnight, as India switched over to the Goods and Service Tax (GST), Geethmala Prashanth stepped into a multi-brand retailer in Bengaluru.
What drew in the homemaker, like many others across states, was the sale offered by Big Bazaar on Friday midnight when the government rolled out what is being described as India’s biggest tax reform since Independence.
Others come just out of curiosity, to get an idea about GST that has subsumed over a dozen taxes into a single tax regime, albeit with different slabs.
Big Bazaar was offering the sale as “GST muharat shopping”.
“The word sale itself is exciting and to come out at this time of the night adds to it,” said Prashanth, who felt the discounts were not the best.
“They’ve made sure they don’t have much loss. You may, at most, get Rs 10 difference (compared with non-sale) on some items because BigBazaar is anyway known for low prices,” Prashanth said.
“Better products at a lower price would have been worth it but the same products at just Rs 10 or so off is not too satisfactory,” she added.
Prashanth wanted to buy a microwave, a dustpan, a bedsheet and teacups but finally settled for a bed sheet sold at a 60% discount on a retail price of Rs 1,199.
Naseer Ahmed, a travel agent, too was not satisfied.
“I was looking only at clothing. The products are good but the discounts aren’t too much,” he said.
The retailer was largely offering a 2-22% discount on food and groceries items, reflective of their new cheaper pricing under GST.
“Sales keeps on happening but this is a price reduction which is permanent,” said Kishore Biyani, chairman and chief executive officer of Future Group, which operates Big Bazaar. Biyani was talking of the sales offers in June.
For those who just bought groceries, the sale lived upto its promise.“It was a pleasant surprise for me...If this (grocery) comes at a 30% discount then there’s nothing like it,” said Akanksha Singh, a credit analyst at a bank.
In Mumbai, regular big bazaar customer Raghunath Bhattacharya too was happy man.
“I bought daily consumption items and got some discount which is a relief,” said Bhattacharya, 60, who visited the mega store in Mahim.
There was also panic buying as many people are rise boom in cost of essentials.
At a Star Bazaar store in Mumbai’s Andheri West, one customer filled four shopping carts with groceries such as biscuits, rice, tea powder, noodles, soaps and detergents, as she felt the prices would go up post GST.
“The prices will shoot up from tomorrow and for a middle-class customer we would definitely look for such sales. Normally, I won’t come for shopping at midnight but if something cheap is available on your plate for a limited number of time, I would try not to lose a chance,” said a 45-year-old woman.
Under GST, daily consumption items such as milk, fruit and vegetables, food grain, pulses and cereals have been exempted from tax. Sugar, tea, coffee, edible oil and newsprint have been placed in the lowest slab of 5% while ready-made garments will be taxed at 18%.
For others still, a sale is a sale and means better prices.
“I made up my mind to come for shopping at Big Bazaar as soon as I came to know about the mega sale late in the evening,” said Poornima Shah, 20, who is confused about the impact of GST on her daily purchases.
Consumer fears of rising prices drove sales across retail stores last month. Moreover, retailers also offered steeper discounts as they looked at making most of the old tax regime.
“I am surprised business has gone unprecedently high. I thought the business would go down but the business from our expectation is 30% up,” said Biyani.
The most visible change under GST is the payment receipt which now reflects the tax slabs for the state, Centre and intra-state transactions and also shows harmonised system nomenclature (HSN) or the master item code.
This is unlike the Value Added Tax (VAT) regime where bills just reflected the MRP of the items and discounts with a summary of the applicable taxes at the end.