Most Indians now know the drill when it comes to the adrenaline of price drops during festive sales. These sales have had quite an exciting run-up this year, given the GST cut that's come in.
The rate cut move has promised lower prices, but there's a crucial catch. Given the timing of the mega sales and the start date of the rate cut, the question is if the benefits will set in for the sales.
What's The Price Puzzle Here?
While the government has slashed the GST on air conditioners, televisions, and dishwashers from 28% to 18%, the new rates are set to take effect on September 22. This timing creates a pricing and savings puzzle for shoppers. Flipkart's Big Billion Days 2025 is scheduled to kick off later this month around Navratri, with Amazon's Great Indian Festival hinted to start "soon".
This means that during the days of the sale, products in stock which were manufactured or shipped before the September 22, will still be sold at the old, GST rate.
"Tax element is a small advantage for everybody across the board universally applied across the country. The elbow room is because of their higher bargaining capability and higher purchase volume for these giant companies. That is how they give big discounts," explains Chakravarthi Bommakanti, GST lawyer and retired IRS officer.
Whatever discount these sales will have will remain the same because it's dependent on the larger system of retailing that giants have and the tax benefits do not come in just yet.
Pause Purchases For A Better Save?
Historically, these mega-sales have offered stellar discounts for consumers, offering deeply slashed prices of up to 50% on home appliances and up to 70% on televisions. To truly capitalise on the tax reduction, consumers will need to time their purchases carefully.
"So maybe the benefit will trickle in a little later in the system. If it's a manufactured product, at the retail level this will take some time. Manufacturer will have to alter his packaging and everything so when it reaches the retail output it may take about 15 to 20 days also," Bommakanti added.
Watch LIVE TV, Get Stock Market Updates, Top Business, IPO and Latest News on NDTV Profit.
