[blacksport]

Originally Posted by binand

It doesn't, in most cases. That model is not sustainable and generally you are allowed to bleed yourself to death. The competition can simply out-wait you (remember Air Deccan?) or match your price raising money just the way you have been. Mostly marketeers find that customers thus acquired are rather fickle, greatly increasing future costs for the company.

I was only describing the premise on which the law was made. Does not mean that i agree with it. In fact, i think that if somebody has the ability to kill competition, he must have earned it really well.

Originally Posted by Kumar R

I am, of course, unhappy I got nothing out of the Flipkart sale and many products had illusory discounts but that does not change my general confidence in Flipkart. I still trust them to display reasonable prices as opposed to mom-and-pop offline stores which might pass off a product at an outrageously high price with no hangups and who cannot digest the fact that a competition could even think of selling a product below an MRP, let alone do so regularly. I like their search function, I like the review feature, and I love the convenience of home delivery with COD. Unless they mess up my orders (cancellation, wrong product, delay) I am going to stick to them and am certainly thankful that they exist. As consumers, I cannot understand why some people are quick to call for FK's head just because a 40% discount was in reality a 10% discount -- that is a trick all sellers use and a little due diligence before purchasing would have given a fair idea.

Where the hell is the "like" button when you badly need one?

[swiftnfurious]

I don't know anybody will be able to fine FlipKart stating that they had given too much of discount. The fact is, those products which had 90% discount or the Rs. 99/- products were sold off even as the deal started.

I doubt any of these products were actually on sale in the first place.

Originally Posted by DRIV3R

...I received my MI 10400 powerbank today and guess what the MRP is, 999 INR. So we have bought it at MRP on the so called big billion day.

As others mentioned, the 10500 MaH version was NOT on discount sale. It was the 5000(?) MaH version that was discounted at 500/- for sale (Original price - 600/-).

[sbala]

Originally Posted by msdivy

Well, Flipkart issue comes under Competition Commission of India (CCI), whose aim is to ensure fair and healthy competition in the markets. But why Enforcement Directorate (ED) is interested here is mystery.

I guess ED is investigating on how multi million dollars was collected by Flipkart, something related to foreign investment.

[blacksport]

Originally Posted by swiftnfurious

I don't know anybody will be able to fine FlipKart stating that they had given too much of discount. The fact is, those products which had 90% discount or the Rs. 99/- products were sold off even as the deal started.

I doubt any of these products were actually on sale in the first place.



As others mentioned, the 10500 MaH version was NOT on discount sale. It was the 5000(?) MaH version that was discounted at 500/- for sale (Original price - 600/-).

5200 and 10400 mAh. It contains 2 and 4 samsung 2600 mAh batteries respectively.

[Thad E Ginathom]

I don't think Flipkart should be fined for giving "too much" discount --- but, whether it is online or off, sale prices should be controlled by law, as is done in other countries. Claimed "full price" must not only be genuine, but should have been in effect for months, rather than minutes or days, before the "sale."

This is standard consumer protection, and it should be in place and enforced.

If Flipkart want to give their money away, either to make single-quarter statistics look good or because they believe it brings in customers for the future, that is their business --- and, potentially, their problem. Are we looking at the beginning of India's very own dot-com collapse here? I think we could be, and that would be a shame for us and a shame for India. A completely lose-lose situation.

[Raccoon]

On a different note, Flipkart is now using sidey couriers like First Flight for delivering parcels, including mobiles. This is really disappointing as their own courier service is much better overall, including the attitude of the delivery guys. The likes of First Flight on the other hand deliver crushed parcels (despite Flipkart's reasonably strong cardboard boxes). They also take longer to deliver. And now I'm even hearing of products being pilfered from the parcels.

So now its not just the deterioration in customer service and policies, even their delivery system is going down. Sad.

[benbsb29]

Originally Posted by Kumar R

I am, of course, unhappy I got nothing out of the Flipkart sale and many products had illusory discounts but that does not change my general confidence in Flipkart. I still trust them to display reasonable prices as opposed to mom-and-pop offline stores which might pass off a product at an outrageously high price with no hangups and who cannot digest the fact that a competition could even think of selling a product below an MRP, let alone do so regularly. I like their search function, I like the review feature, and I love the convenience of home delivery with COD. Unless they mess up my orders (cancellation, wrong product, delay) I am going to stick to them and am certainly thankful that they exist. As consumers, I cannot understand why some people are quick to call for FK's head just because a 40% discount was in reality a 10% discount -- that is a trick all sellers use and a little due diligence before purchasing would have given a fair idea.

Well said. There are innumerable times when retailers have advertised sales at "Upto 40% off". This doesn't necessarily mean all items are at 40% discount, and neither does it mean the sale is on ALL items. No one cried foul then, why now?

Also, someone had pointed out earlier about the various gimmick sales which Big Bazaar hosts, where was everyone then?!

[blacksport]

Some clarity:

http://m.ibnlive.com/news/ed-not-pro.../506182-7.html

[sourabhzen]

Originally Posted by Kumar R

Almost all indirect taxes on goods sold are linked to the sale price. The higher the price the more the tax. VAT, Excise, Service tax are all in this category. Whether the good is a car or a mobile, the indirect taxes paid will be a function of the sale price and not the 'ideal' price. This can be easily verified by looking at the invoice of a discounted good. A few indirect taxes like customs, stamp duty are often leviable on the 'fair' value of a product so those are not affected by sale price.

If you go to any store (Shoppers Stop, Lifestyle etc) offering discounts, you will see small notification somewhere that VAT is payable at non discounted price. Hence a 25% discount will not actually translate into a absolute 25% savings. This was enforced by the revenue department after ridiculous sale offering by likes of Koutons (70% +50%) discount schemes. This may be a state issue and implemented only in Haryana but that's the way it is for quite some time now.

[FordDodo]

I'm planning to purchase this cycle from AliExpress. It will be shipped as a Gift item. I wanted to know if this product will be caught by Customs. If caught, what will the amount to be paid legally? Cycle cost is around 7k INR.


http://www.aliexpress.com/wholesale?...358&isrefine=y

[blacksport]

Originally Posted by Thad E Ginathom

I don't think Flipkart should be fined for giving "too much" discount --- but, whether it is online or off, sale prices should be controlled by law, as is done in other countries. Claimed "full price" must not only be genuine, but should have been in effect for months, rather than minutes or days, before the "sale."

This is standard consumer protection, and it should be in place and enforced.

For cheating, there already is a law. Discounts are always calculated on the original price, which in this case is the MRP. If I am selling a Rs 100 product at Rs 90, I would advertise that I am giving a 10% discount. Tomorrow, if I decide to sell it for Rs 80, I am every bit right, if I claim that I am giving a discount of 20%.

Maybe, this is a better way of showing the price.

[Kumar R]

Originally Posted by sourabhzen

If you go to any store (Shoppers Stop, Lifestyle etc) offering discounts, you will see small notification somewhere that VAT is payable at non discounted price. Hence a 25% discount will not actually translate into a absolute 25% savings. This was enforced by the revenue department after ridiculous sale offering by likes of Koutons (70% +50%) discount schemes. This may be a state issue and implemented only in Haryana but that's the way it is for quite some time now.

I have heard of this practice but from a reading of the law this is illegal. Retailers who resort to this do so at their own risk and as a matter of fact there are consumer cases pending against some of them.

The law is very clear that sale price for VAT calculation is to calculated taking discounts into account. Here is the definition of sale price from the Haryana VAT Act.

“sale price” means the amount payable to a dealer as consideration for the sale of any goods, less any sum allowed at the time of sale as cash or trade discount according to the practice, normally prevailing in the trade, but inclusive of any sum charged for anything done by the dealer in respect of the goods at the time of or before the delivery thereof and the expression “purchase price” shall be construed accordingly;

Ditto for Central Excise

"transaction value” means the price actually paid or payable for the goods, when sold, and includes in addition to the amount charged as price, any amount that the buyer is liable to pay to, or on behalf of, the assessee, by reason of, or in connection with the sale, whether payable at the time of the sale or at any other time, including, but not limited to, any amount charged for, or to make provision for, advertising or publicity, marketing and selling organization expenses, storage, outward handling, servicing, warranty, commission or any other matter; but does not include the amount of duty of excise, sales tax and other taxes, if any, actually paid or actually payable on such goods. (rep. from C.E.Act)

(2) The VAT on all my online shopping invoices (Flipkart, Amazon) are calculated based on the net price (after discount). I am curious to know if any online retailer has indeed charged VAT on the MRP.

To best of my knowledge no law provides levy of VAT on undiscounted price. That would open a huge pandora's box because legalities aside, undiscounted prices of most goods and services change over time and to keep track of the prices is practically impossible. (Eg. Intel CPU prices are constantly sliding. The printed MRP on the G3220 CPU I bought last month is Rs 5800 but the VAT I have been charged is on the sale price of Rs 3200.)

[sourabhzen]

Originally Posted by Kumar R

To best of my knowledge no law provides levy of VAT on undiscounted price. That would open a huge pandora's box because legalities aside, undiscounted prices of most goods and services change over time and to keep track of it is practically impossible. (Eg. Intel CPU prices are constantly sliding. The printed MRP on the G3220 CPU I bought last month is Rs 5800 but the VAT I have been charged is on the sale price of Rs 3200.)

Thank you for your inputs. After reading your post I checked my Flipkart invoice and checked the invoice which confirmed what you said. Now I wonder how much have these retailers looted in the name of tax!

[blacksport]

Originally Posted by Kumar R

I have heard of this practice but from a reading of the law this is illegal. Retailers who resort to this do so at their own risk and as a matter of fact there are consumer cases pending against some of them.

I too thought that it was illegal, but since retailers in Bangalore has been doing it for the last 3-4 years, I guess there should be some legal sanction. Moreover, what I noticed is that they charge 5% VAT on the total amount, not the discount. For example, For a Rs 1000 shirt at 20% discount, they charge 5% VAT on Rs 800, so the price comes to Rs 840. recently I bought a shirt at 25% discount and saw that some of that discount was wiped out in the final price.

This practice seems to be for apparels only. I bought a Citizen Ecodrive at 25% discount from Shoppers Stop, and there was no extra VAT added.

I think this whole thing is foul, and tax should not be levied on money that is not transacted.

[binand]

Originally Posted by blacksport

For example, For a Rs 1000 shirt at 20% discount, they charge 5% VAT on Rs 800, so the price comes to Rs 840. recently I bought a shirt at 25% discount and saw that some of that discount was wiped out in the final price.

Nitpick, but there is no discount being wiped out in this case. You'd have paid 1050 on the shirt undiscounted (with 5% VAT), and now you paid 840 (after discount, incl. VAT). That's still a 20% discount.