GST forces a shift in consumers’ lifestyle, shopping habits

Live mint By Kavya Kothiyal Mon, Jul 10 2017. 04 42 AM IST

The general perception among consumers is that grocery and discretionary spends such as clothes and eating out have become more expensive after GST

Sugar, tea, coffee and edible oil are attracting 5% GST rate while readymade garments are being taxed at 18% GST rate. Photograph: Abhijit Bhatlekar/Mint

Mumbai: As the roll out of goods and service tax (GST) on 1 July completes a week, few consumers have started changing their lifestyle pattern while for others, life remains the same.

The general perception among the consumers is that most household items such as sugar and wheat flour to discretionary spends on apparel and eating out have become more expensive after GST.

“Today for the first time I came out for shopping at Big Bazaar after GST, and I found a price difference and atleast Rs3-4 were increased on sugar, rice and dairy products. I am amazed to see increased sugar prices, which is one of the most needed household items,” says Jasmine, a regular customer at Big Bazaar in Matunga area.

“Though some shops are still offering discounts on essential commodities, but many important household items which I had in my list, are not available in this store, therefore I might go to D-mart to do the rest of my shopping,” said Jasmine, hoping to buy household items at a cheaper rate.

At midnight on 30 June, when the Indian economy saw one of the biggest tax reforms, the retail chain, Big Bazaar offered 2-22% midnight sale called GST ‘muhurat’ (auspicious) sale, which attracted customers of all age groups.

“The discounts are still available on some of the items even after a week. This may be done by the shopkeepers to clear the old stock,” said Jasmine, who appeared tense after the rise in GST rates on some essential household commodities.

However, the sale lived up to the promise for those who just did grocery shopping.

Meher, 40, who was hoping to buy bedsheets ended up buying a pair of Bombay Dyeing bedsheets, two foot-mats and a basket without thinking much of the available discounts. She says, “I haven’t really compared the prices of essential commodities as yet. Daily need things have to be bought, no matter what the prices are. Big Bazaar is relatively cheaper and being a regular customer, it doesn’t really matter to me as of now.”

Under GST, the daily consumption items like milk, fruit and vegetables, food grains, pulses and cereals have been exempted from taxes. Sugar, tea, coffee and edible oil have been placed in the lowest slab of 5% while ready-made garments are to be taxed at 18%. Habitual window shoppers and those who enjoy binge shopping, will have to be more careful now.

“H&M and Lifestyle have been my favourite brands. Since H&M continues to offer 70% discount, it is exciting for a shopaholic like me. This is for the first time that the brand has extended a discount for as long as a month, as they want to clear the old stock,” said Shreya Mehta, who has been on a shopping spree after the GST, just to because of the lucrative discounts and offers.

“After GST, buying apparels have become a bit costlier because of which I have to restrain my shopping habits.” Shreya added.

On the other hand, it has become somewhat cheaper to eat out now. Large restaurants chains like KFC, Dominos, McDonald’s, Pizza Hut are levying 18% tax on eatables which comprises of 9% CGST and 9% SGST. This has come out as a great relief for the youngsters, who enjoy eating out.

“I used to spend a lot at Burger King and McDonald’s earlier, but now I can notice the difference in the overall bill. Earlier a meal consisting of a burger, french fries and a coke would cost me approx. Rs125, but today the same meal costs only Rs117. This is a huge difference in prices,” said Aaraya, a fashion designing student, who was hanging around at Burger King with friends.

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