Based on online prices representing a trend suggest that GST induced price cuts are not sticking in full in many sectors
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Several items clocking high online sales in the last 1 month on Amazon, saw sizeable price reduction immediately post GST rationalization. However, in certain cases, there is an evidence of part reversal in prices thereafter. The partial price reversal seen in online channel sales could get..…replicated in offline sales too, given competitive pricing.
These price adjustments should be seen as market’s way of price discovery in a new tax regime possibly reacting to stronger festive demand, adjustments to recoup pre-GST cuts inventory-sold at a loss, and/or impact of Rupee depreciation. Overall, we view a 7-10% correction in prices on a net basis so far, being considerable.