Skip to main content

TV, fridge, AC prices may rise twice this year


Many companies considering price hikes over the next few months to pass on the burdens of GST and material cost. Prices of televisions, airconditioners, washing machines and refrigerators may rise twice this year because of higher input costs and a new tax structure.

Videocon, Panasonic, LG and Whirlpool are considering immediate price hikes to pass on the additional tax burden under the goods and services tax (GST). The rise in material prices over the past few months may be passed on during the festive season.

Prices of steel, copper and plastic have been rising since February. Prices of components such as compressors for ACs and refrigerators have risen up by 4 per cent and prices of TV panels have risen by 3 per cent.

Under margin pressure, companies had postponed price hikes till the festive season. Rajeev Bhutani, vice-president, marketing, Samsung India Electronics, had told Business Standard earlier that the increased cost of TV panels would have to be passed on.

“We have not yet decided the price hikes under the GST. We are also calculating the hikes to avoid impact on demand GST comes as second blow with up to 4% rise in effective taxation Companies can’t absorb additional costs, may have to hike prices again to pass on input costs ahead of festive season effect of higher prices of steel, copper and plastic. Hopefully, the increase will be spread over the coming months,” said Kapil Agarwal, vice-president, Whirlpool of India.

“We expect prices of TVs, refrigerators and microwave ovens to go up by 3-4 per cent due to the GST,” said Manish Gupta, chief financial officer, Panasonic India. While manufacturers are focused on passing on the additional tax burden of the GST, many are planning a twofold increase. Videocon is planning price hikes of 2.5 per cent now, but more will be in the offing.

“Increases in prices of components have been set off to some extent due to a marginal drop in dollar prices. But it is very much likely that prices may rise later,” said CM Singh, chief operating officer, Videocon.

Executives with other consumer durables makers said steep hikes in the lean season were out of the question.“We will wait till the festive season before increasing prices. Now we are merely passing on the additional tax,” an executive said.

Business Standard New Delhi, 06th July 2017

Comments

Popular posts from this blog

Shrinking footprints of foreign banks in India

Shrinking footprints of foreign banks in India Foreign banks are increasingly shrinking their presence in India and are also becoming more conservative than private and public sector counterparts. While many of them have sold some of their businesses in India as part of their global strategy, some are trying to keep their core expertise intact. Others are branching out to newer areas to continue business momentum.For example, HSBC and Barclays Bank in India have got out of the retail business, whereas corporate-focused Standard Chartered Bank is now trying to increase its focus on retail “Building a retail franchise is a huge exercise and takes a long time. You cannot afford to lose it,” said Shashank Joshi, Bank of Tokyo-Mitsubishi UFJ’s India head.According to the Reserve Bank of India (RBI) data, foreign banks’ combined loan book shrunk nearly 10 per cent from Rs 3.78 trillion in fiscal 2015-16 to Rs 3.42 trillion last financial year. The banking industry, which includes foreign banks…

RBI rushes in to prop up falling rupee

RBI rushes in to prop up falling rupee India’s central bank reportedly intervened in the currency markets on Monday to prevent a further slide in the local unit, which breached the 67 mark to a dollar for the first time in 15 months amid a widening trade gap and runaway import bills fuelled by high crude-oil prices. Some state-owned banks were seen selling dollars aggressively, interventions that market dealers attributed to the central bank’s strategy to stem the decline of the Indian rupee against the US currency. The rupee is the worst performing among a dozen Asian monetary units in the past three months. It lost 4.25 per cent to the dollar during the period, show data from Bloomberg. On Monday, the Reserve Bank of India (RBI) is said to have sold about Rs 800 million collectively on the spot and exchange traded futures markets, dealers said. An email sent to RBI remained unanswered until the publication of this report. The currency market has seen such a strong central bank interven…

GST Refund of Rs 20,000 Cr Pending: Exporters’ Body

GST Refund of Rs  20,000 Cr Pending: Exporters’ Body Refund of over Rs 20,000 crore on account of Goods and Services Tax (GST) is pending with the government with more than half the amount stuck as input tax credit, Federation of Indian Export Organisations said on Tuesday. While claims over Rs7,000 crore were cleared in March, the amount was Rs 1,000 crore in April.However, after exporters’ request, the GST council and tax department are organizing a second phase of Special Refund Fortnight starting May 31, which will enable exporters to draw their refunds at a speedy pace. Many exporters have been unable to file the refund of input tax credit due to technical glitches, exports and claim happened in different months. The major challenge lies on ITC refund especially because the process is partly electronic and partly manual which is cumbersome and add to the transaction cost, the exporters’ body said. On IGST, refunds are getting delayed due to airline and shipping companies not submitt…