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Manish Sharma, President of the Consumer Electronics and Appliances Manufacturers Association, makes light of the impact of the GST on the industry. Excerpts:
How has the consumer durables industry coped with the transition to GST?
GST is the outcome of several years of hard work by successive governments and will definitely boost economic activity. There was no significant impact on our industry during the process of setting up the accounting and IT infrastructure. The transition was smooth for big retailers as they had prepared well in advance; however, it took the medium and small retailers time to upgrade their systems as they did not have the resources to comply with the IT-driven tax system.
Did the industry see any price hike due to GST rollout?
The industry did not witness a price hike. The GST rollout has been very smooth, although July marked an all-time low as brands and retailers were cautious in the run-up to the implementation of the new tax regime.
What has been the overall impact on the industry so far?
With a normal monsoon season and a hike in allowances for government employees, consumer demand is expected to gain pace as the festival season draws near.
What are the key challenges that the industry faces following GST implementation that the government needs to address?
It has been easy for large chains to migrate to the GST system as they had prepared well for the reform, but small dealers and shops across the country faced initial hiccups and are taking their time to settle into it. We request the government to review the GST on consumer durables from the current 28 per cent to 18 per cent to help generate demand.
What are your expectations for the upcoming festival season, the first following the advent of GST implementation?
The upcoming festival season looks promising. Pent-up demand due to favourable monsoons and a good harvest should boost rural demand. Moreover, an increase in Central employees’ allowance and the rate cut by the monetary policy committee in August will drive consumer confidence and sales.
In addition to TVs and washing machines, the industry expects sales of kitchen appliances, beauty products and wellness products to increase 10-20 per cent this festival season.
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