no GST, no cascading effect right?
after every change there will b another change. in every action there will b a reaction as termed in physics. this gst thing will be the catalyst and it will spiral up to create the multipler effect or vicious cycle as termed in economics.
businessmen r here to take advantage of opportunities of all kinds. some businesses loudly advertise that they will absorb the gst hike. do u think that they r doing charity? most likely not. most probably,trying to increase sales with the same pricing at a lower margin but with a targeted higher volume to achieve a higher net profit at the end of the finiancial period.
in the real world, any change in fiscal policy alway ended up with the masses paying more. the best example was the conversion of the european currencies to Euro in 2002. despite years of preparations and with official conversion rates, when D-day came, many retail prices was converted to a higher selling price - some as much as 50% higher. european liberte in protest kicks in and gov laissez faire prevails. all the 12 europeans nations had the same experience.
Will price of items immediately increase come 1st of July in the camera shops? (MS Colour, TK Photo, Cathay Photo etc...)
This is confirmed... Once hit 1st july, the prices all will rise by 2%. What we don't know is what they might choose to add on claiming "ai ya, gst rise we also pay more". It all depends on the goodwill of the dealer, but in the long term, overall prices will rise due to inflation, so...just BBB now to escape!
e.g. electricity prices gone up claiming oil prices....but we all know a large percentage of our electricity are generated from natural gas and natural gas prices were negotiated years ago before the construction of the pipelines started.
Prices of electronic goes down over time because the cost of production is actually very cheap. The R&D and IP cost more than the production cost. Since R&D cost is spread over a certain number of months, electronics prices drop drastically once the R&D cost is recovered usually after the first 18 mths.
Fierce competition sometimes shorten the R&D cost recovery period which will result in the company making losses (paper loses).