Sales buoyant, but margins shrink

AHMEDABAD: With pushes for stock clearance ahead of the implementation of Goods and Services Tax (GST), consumer electronics retailers have completed their sales targets for the month of June earlier than usual. With a host of offers raining and sales increasing by at least 35%, it was a festive season for electronics retailers across the city.“We’re offering discounts up to 40% on goods such as refrigerators and air conditioners, among others. This has led to a significant jump in sales for the month of June,” said the sales head of an electronics retail chain on SG Road. “The demand for products is significantly high and is thus proving beneficial to electronics dealers,” he added.Several consumers also choose to buy goods at this point not just to avail discounts but also to avoid the chances of having to face price rises in July, after GST implementation. “Getting a new refrigerator was on the cards and later, when the GST rates on consumer durables were declared, we decided to prepone our purchase from August to June to avoid paying a little extra on the same product,” said Rajan Parekh, a resident of Vejalpur.According to GST rules so far understood, dealers will get input tax credit on existing inventory of goods that is not older than a year. However, experts say that several dealers tend to stock up on various units of electronics goods and currently are clearing off older stocks. “Most dealers are clearing off old stock, especially those over a year old. This is mainly to get benefits of the input tax credit,” said Sunil Motwani, vice president, Relief Road Electronics Dealers Association.Even though sales are buoyant, it is not translating into major profits for electronics dealers.