Many people are saying to clear as much stock as possible before 1st july.
And some are of the view to not give such heavy discounts to clear stock..
How shall this be decided?
This decision depends on many things.
let me give you and example
suppose Mr. A is a trader who purchases his goods @ 6% vat and sell it at the same rate. He purchased a product at Rs. 100 plus 6% = Rs/ 106 and sells at 25% profit on cost which is 125 plus 6% = Rs. 132.5. Now suppose for this product gst is 18% and after gst he might get his product for Rs.85(example) plus 18 gst and then sell it at 25% profit on cost which is 106.25+18% which comes to Rs.125.38 but for now i mean goods which are in stock as on appointed date if they are sold at 25% margin on cost plus 18% gst it will come to 125plus 18%= 147.5 which will increase the selling price for stock in hand and because of which your customers might not purchase from you.
so considering the above example you can take that decision.
CAclubindia
