Why Foreign brands do not want to open exclusive Store in India

Apple has not opened its exclusive store in India and most premium brand are not yet ready to open company operated outlets. They are preferring franchise own franchise operated outlets.

Indian Vat structure is very complicated, and varies state to state, we shall like to explain this complex structure with one chosen SKU i.e. Mobile handset. It can be understood that if it is too complicated with one SKY, how it will work with multiple products in same outlets. It is need of hour to brought GST and implicate same asap to revive structure and invest in fruitful business activity rather than playing in hands of sales tax department.

VAT on Mobiles, Mobile Accessories, Tablets, Data Card and CDIT Products

Sales tax or VAT is amount that is charged from end user on selling price. It is also called VAT Value added tax, as each has to pay on additional value or price charged. For example, If a product A is priced 100 rupees by company, and go to National distributor at Rs. 102, then national distributor sell it regional distributors at Rs. 103, from regional distributors sell it to local stockist at Rs. 105, local stockist give it to retailer at Rs. 107 and local retailer sell it to end user at Rs. 115, then VAT liability will go to everyone but on value addition done at each level. So company has to pay VAT for Rs. 102, ND for Rs. 1, RD for Rs. 2, Local Stockist for Rs. 2 and  retailer for Rs. 8.

VAT structure is very complicated in India, it varies state to state and also within state depending upon pricing of item. we shall summarize here VAT on Mobiles, Mobile Accessories, Tablets, Data Card and CDIT Products

You can understand how complicated it is to deal with sales tax department if your business is in multiple cities, your time and energy goes at wrong direction rather than budding and sustaining business.

And this is not uniform on all mobile products, VAT on mobile accessories and merchandiser repair is also different, it goes as below

Mobiles and CDIT products are often taken as product fo same family, however this doesnt go well with VAT department, Tablets, Data card and CDIT product has alien VAT structure.

We have here dealt here broadly with mobile category and this is already too complicated. Furthermore, it is not static and can be changed by respective state. Also, it can be changed at any time of the year. It is solely up to vendor to keep update itself with these changes or onus will b eon him.