The Onam market of white goods in Kerala, often considered a bellwether of the upcoming festival seasons in the rest of the country by industry majors, witnessed an unexpected irony this year. The announcement of the major revamp in the Goods and Services Tax (GST) structure, which is expected to push consumption with a considerable cut in prices, has had some sort of a negative impact on the Onam market at a time when sales were supposed to peak, according to a section of traders.
Many consumers have postponed their purchase plans anticipating a price fall once the tax revision comes into effect from September 22. Prices of several high-value electronic items, including televisions, air conditioners, refrigerators, dishwashers, and washing machines, are expected to come down under the new two-tier tax structure with rates of 5% and 18%. Items that were earlier taxed at 28% will now fall under the 18% bracket. The decision was announced by Union Finance Minister Nirmala Sitharaman on September 3. Key traders in the Kerala market said they had to deal with a dip in customer footfall, especially for televisions, following the announcement.
8% dip in TV sales
“The sales of TV were going good initially. However, there was a dip following the news of the GST revision. Our preliminary estimate is that there was a fall of around 8% in sales of TV this season, compared to previous year. One reason is understood to be the consumers’ decision to wait for sometime, expecting a fall of up to 10% in prices,” Peter Paul Pittappillil of Pittappillil Agencies said. Mr. Pittappillil said the sales of air-conditioners saw a dip of around 30% while the figures of washing machine remained almost flat. He exuded confidence that the drop in expected sales could be compensated after September 22. “Intermittent rains during the Onam days also took a hit in sales,” he added.
