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GST to dampen Diwali celebrations

The Modi government’s hasty decision to introduce Goods and Services Tax (GST) will adversely affect bottom line of traders during the upcoming Diwali festival. After the introduction of GST, there has been a sharp decline in volume of sales of various commodities due to rising input cost. Even though traders had urged the government to delay the introduction of GST but the bill was introduced in a hurry. GST has impacted sales of fire crackers, sweets, garments, earthernware and other commodities.

Various slab rates of GST like 5 per cent, 12 per cent, 18 per cent and 28 per cent has further created confusion among sellers as there is no clarity about which item will fall under which slab. Thus vendors are staring at bleak Diwali this time as they are expecting decline in sales. Even consumers are unwilling to shell out more money from their pocket due to rising inflation in the aftermath of GST rollout. Home appliance makers are worried about the impact of GST on sales as they are expecting a fall in sales of fridge, TV, washing machine and are planning various promotional strategies to attract customers. Even earthernware makers are expecting a decline in sales of pots and oil-lamps used during Diwali. Many of them want the government to bail out the pottery industry by offering some incentives. Traders have demanded for a review of the current GST slabs to make it more tax-payer friendly.

Anwar Shaikh, a carton box manufacturer said, “Definitely we are facing severe hardships after GST rollout. Earlier we used to receive bulk orders for cartons prior to the arrival of Diwali festival but this time we haven’t received a single order yet. We are finding it difficult to pay labourers due to decline in sales. Most of the big manufacturers used to place order for cartons but this time they are avoiding us.”

Sanjay Panchal, proprietor of plywood shop said, “There has been a sharp decline in sales after the GST implementation. Our sales usually increase during festive season but this time the scenario is different. We can’t afford to pay high GST rates as it becomes difficult for us to run our business.”

Sunil Dumale, an artist said, “We do brisk business during Diwali by selling lanterns and oil-lamps. Raw materials used for preparing these items have become expensive after the introduction of GST. Thus we have no option left but to pass on the increased cost to customers. Usually, customers used to place orders for lanterns before Diwali but this time the enthusiasm is missing”.

Deepak Salve, banker said, “After the GST rollout, business of small and medium traders have been adversely affected. Middleclass people are avoiding small shops due to high GST rates. Narendra Modi had become Prime Minister after successfully serving as the Chief Minister of Gujarat. Despite this, clothes manufacturers and traders had protested against GST rollout in his state.”

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