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Hope devices will be cheaper
Hi Shubham, I totally get your hope for cheaper devices especially one's like TVs above 27 inches that still have higher taxes of 31%... The government did announce some changes in GST rates on electronics, but whether it'll directly lead to lower prices is still uncertain due to the many challenges the electronics industry has... Let's hope for the best
Loaferg wrote:Definitely, their profit margins may be multiple than the tax they are paying (probably the reason why they are still in business) but tax does play an important role in the cost of the product and what the end user has to pay.. and apart from that there can be several other factors that may affect a price of the product such as Supply Chain etc
If taxes decrease and manufacturers sellers decide to pass it on to customers the real benefits reaches at Tortoise pace mostly with minimal effect as they want to gulp it claiming input costs increase etc . The only thing that brings down price is the manufacturer seller decision for prices seeing competition , stock holding , to keep production units running on , etc . There profits margins is multiple than the meare tax on its products.
but yes, even I think that the pace at which the benefits would get passed on to the customer would be much slower than what we may expect... Thank you for your comment @loaferg
sasasasa wrote:Correct..thanks for your comment
let's see how much it effect on rates
Mostly companies dont pass down the benefits they get to customers. When transition is from lower to higher tax, they would increase prices in a flash, but when tax decreases, the companies would keep the price higher and take their time so that in meanwhile they can fleece the customers for a short period. We see this in restaurants where taxes at the lowest ever but still those companies never corrected their prices.
This is just my observation
All companies will not change MRP. All have old stock with old MRP. Changing MRP is a tedious task for all OEMs as they have to change may things.
Mostly all items are sold at MRP and discount on MRP to end user.