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AC Market Special -- India
2017/08/24
Reported by Rakesh Kumar, Managing Editor, ISHRAE Journal
 
Market Scenario
 
During the first half of 2017, the Indian economy faced two disruptive events. The government suddenly announced demonetization of high value currency notes on November 10, 2016, and the resultant shortage of currency that accounts for almost 80% of the country’s financial trans-actions impacted the market significantly till the end of first quarter of 2017. The white goods industry, including room air conditioners (RACs), saw a significant drop in primary sales due to this factor.
 
The second event was the elaborately planned introduction of Goods and Services Tax (GST) over all the 28 states of India on July 1, 2017, subsuming a large number of central, state, and local indirect taxes like excise duty, customs duty, service tax, value- added tax (VAT), entry tax, and octroi. Due to uncertainty about input tax credit for stocks purchased before July 1 but sold to end customers during the GST regime, dealers hardly purchased any stocks during the months of May and June and liquidated their stocks by offering huge discounts to end customers. As a result, there was a wide difference between primary and secondary sales numbers during this period.
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