E-commerce companies no more have the edge in iPhone pricing, thanks to GST

While earlier there used to be a major gap of around Rs 5000-8000 in online and offline prices of iPhones, the same is not the case post the implementation of goods and services tax (GST).

Indian e-commerce space has now lost its edge of providing iPhones for lesser amount after heavy discounts, because of the tax overhaul introduced on July 1st.

The marginal difference they can now offer is of Rs 1500-2000, which is possible as Apple distributors had supplied the products to online sellers from states that had a low value added tax (VAT).

However, now that VAT has merged into a uniform GST rate, tax arbitrage that VAT offered can’t be used by the retailers.

The maximum discounts that online sellers can now provide to buyers would be whatever they save in distribution cost, say distributors, who are now resorting to a uniform margin across sales channels with no big price difference.

This would lead to offline business of iPhone to grow at a rapid speed, especially in modern trade, because of the price difference fading away.

It would also lead to more authorised resellers from the house of Apple, who would partner with small cellphone store owners. While presently the number of these authorised resellers is around 200, it might go up t 350 to 400 in the days to come.