New Delhi: Leading watchmakers and retailers in India have lowered their prices by 7-10% following the reduction in tax rates under the goods and services tax (GST).
The GST Council on 10 November reduced the tax rates on 178 items, including watches, to 18% from 28%. Passing on the benefits of reduced GST to consumers, companies like Ethos Watch Boutiques, Titan Co. Ltd and Timex Group India Ltd have lowered the prices on all the existing stock (across all price segments) by 7-10%, top executives of these firms said.
“We immediately cut the prices on all our watches (starting at Rs2,000) by 8%. With this rate cut, most watches in India have become cheaper than anywhere in the world. That’s a huge positive for the industry. Additionally, watch smuggling will come down," said Pranav Saboo, co-founder at Ethos Watch Boutiques, the authorized retailer of more than 60 luxury watch brands including Rolex, Omega, Cartier and Rado.
While Timex has planned a reduction of 7-10% in prices for all existing stock as of 15 November (and bought on or after 1 July), Titan is lowering the price by 7-8%.
“We have given instructions for reduction in price by 7-8% across all SKUs (stock keeping unit), which corresponds to the reduction in the GST rate from 28% to 18%. It will initially be given in the form of a discount until we change the prices for the watches in the course of time," said Subbu Subramaniam, chief financial officer at Titan Co., which sells watches at a starting price of Rs6,000, going up to Rs7.5 lakh for crafted watches.
“The slash in tax rates by the GST council was a welcome move for businesses, especially small and medium enterprises. Revised GST rate and tweaking in rules will relieve the watch parts suppliers and small vendors, which will in turn reduce import from China and other countries, thereby encouraging Make in India initiative," said Sharmila Sahai, managing director at Timex Group India, which sells watches at an average price of Rs4,000.
According to market research firm Euromonitor, the watch industry in India was estimated at Rs8,185 crore (at sales value) in 2016, growing (between 2012 and 2017) at a compound annual growth rate (CAGR) of 13.9% (accounting for inflation). Between 2016 and 2022, the industry is expected to grow at a CAGR of 4.3% (at constant prices).