Sunday, February 9, 2014

Is Ritu Wears adapting to ethical business Practices? probably "No".

Is "Ritu Wears" adapting to Ethical Business Practices? probably "No".

This is a snap taken at "Ritu Wears" Faridabad who have announced off season sale discounts. A discount of 30% to 60% is being offered. The MRP of products is also displayed and MRP is a price inclusive of all taxes, VAT etc. Now when the discount on MRP is offered, the discounted price becomes MRP implying that the discounted price is also inclusive of taxes, VAT etc. As can be seen that Ritu Wears after discount is also charging VAT extra. The charging of extra VAT is an unfair trade practices as the price after charging VAT becomes expensive to the extent of VAT which in most of the items is 12.5%. 

This means the price where the discount has been displayed as 50% makes effective discount to be 43.25% instead of 50% which is unfair trade practices as well as misleading selling. 

Let me take another example. Say the company has announced 10% discount in the off season sales. With the announcement as above, the company would give a discount of 10% and after giving a discount will add VAT @12.5% which would make the price more than MRP. But no one can sell at a price more than MRP. 

 I suggest consumers to be vigilant and report such matters to the concerned agencies like Legal Metrology, Trade/Sales Tax department as well as ASCI as the display of discount is misleading. I would also seek consumers opinion/experiences on such practices as well as advise of CAs/Tax Consultants.

1 comment:

  1. Isn't it a too blatant loot of public?