My husband and myself went to the Benetton show room in the city to do some purchase since it is the sale going on everywhere. We are regular customers of benetton these days whether we buy online or from retail shops.
This time we went to the Benetton Showroom directly and bought a jeans which had 40% off , a clutch and a pair of sandals, which were having flat 50% off and some other things which didn’t have any discount. we bought it and came back home.
But when I heard the total bill amount, I had a feeling that we have paid more than the actual amount. So when I came home I just checked it and it was surprising that we paid more than 50% for the so called "Flat 50% OFF" items! When checked in detail, I could see that additional VAT has been added to the payable amount, after discount.
We went back to the shop next day and started questioning the guy in the shop why is that so. He started saying it is the policy of UCB. The 40% and 50% off is on MRP and we have to pay additional VAT which is 5% for clothes and 14.5% for accessories. My husband started questioning why additional VAT since The MRP is inclusive of all Taxes, they said it is as per the "Terms & Conditions" of the sale.
We were arguing since we are paying additional VAT, the 50% off should not be on MRP, but on the taxable value and then it is fine to add VAT. Again he was saying it is as per the "Terms & Conditions". He then he showed us the terms and conditions and it was mentioned in the the list that the "Discounts are on the MRP and additional VAT is applicable". And he was saying us it is not just with UCB but with every brand. So we understood why we didn’t get the "FLAT 50% OFF" on the products!
How many of us really go through the Terms and Conditions???? They display "FLAT 50% OFF" in VERY BIG letters and "Terms&Conditions" in very small letters (tinier than ant) which clearly specifies you are NOT getting a "FLAT 50% OFF". So whenever some retail shop say "FLAT" offers please note that it is not really a "FLAT" offer.
If you want an exapmle,
The MRP of jeans is : 2999/-; which had 40% off
The MRP of clutch is: 2799/-; which had 50% off
The MRP of sandal is: 2699/-; which had 50% off
Ideally the bill should be like this without any discount
MRP Taxable Value Tax % Tax Amt Net Value
2999 2856.19 5% 142.81 2999
2799 2444.54 14.5% 354.46 2799
2699 2357.21 14.5% 341.79 2699
If it was "FLAT 50% OFF" as they claim to be, it should be on MRP and no additional VAT should be added.
MRP Discounted Value
2999 1799.4
2799 1399.5
2699 1349.5
---------------------------------------------------------------------------------------------------------------------------
Total 4548.4
But the Actual bill was
MRP Discount Rs Taxable Value Tax % Tax Amt Net Value
2999 1199.6 1799.4 5% 89.97 1889.37
2799 1399.5 1399.5 14.5% 202.93 1602.43
2699 1349.5 1349.5 14.5% 195.68 1545.18
----------------------------------------------------------------------------------------------------------------------------Total 4548.4 488.58 5036.98
So we paid an additional amount of 488.58/- as VAT.
If the discount was on Taxable Amount and then added the VAT, they won’t get this additional profit.
MRP Taxable Value Discount Rs Taxable Value Tax % Tax Amt Net Value
2999 2856.19 1142.48 1713.71 5% 85.69 1799.4
2799 2444.54 1222.27 1222.27 14.5% 177.23 1399.5
2699 2357.21 1178.61 1178.61 14.5% 170.90 1349.5
----------------------------------------------------------------------------------------------------------------------------Total 4548.4
The total amount is same as that of the actual 40% & 50% off on MRP without the VAT. So what they are gaining with the "OFF SALE" is the additional amount they take as VAT.
Some people may be thinking what in paying 500/- extra when you are buying something worth 5000/-. Why do they take that additional amount as VAT??? Not directly as their PROFIT? It is not about paying or NOT paying the money, but the right to have correct information.
How many of you know these tricks before reading this will give you the answer. I can tell you, we never knew about this until today!
This is there with other BRANDS as well. So next time when you buy for a sale, hope you check it!