New GST rule on higher tax for exchange offers leaves retailers in a fix

Tax will be calculated on price of the new product and discounted amount will not be considered

Retailers and traders dealing with consumer durables items like televisions, refrigerators, air conditioners, washing machines and mobile handsets, among other things, are in a fix. If the government has its way, the much-awaited goods and services tax (GST) that kicks in later in the year will make exchange schemes for all major consumer electronics and home appliances unattractive. This could seriously jeopardise the business model that most dealers currently follow.

According to the new draft norms, released by the government on Sunday, in case of consumers buying any item under exchange offers the tax calculation will not factor in the