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Ludhiana

Posted at: Jan 13, 2018, 12:48 AM; last updated: Jan 13, 2018, 12:48 AM (IST)

GST impacts kite business in city

Manav Mander

Tribune News Service

Ludhiana, January 12

Even kites have not been spared from the ambit of the Goods and Service Tax (GST). Its impact on kites can be seen in the market. Manufacturers this year have limited the production of kites, thanks to the new tax regime. At present, five per cent GST is applicable on kites.

The kite production has become dearer as its supply has dwindled leaving various manufacturers unable to bear the cost of raw material. Besides, the complex system of filing the GST return has made the matter worse for businessmen.

Raw material used in manufacturing of kites is taxed at various rates. The GST on paper is 12 per cent and for the paper and stick is five per cent.

For the finished product — kite — the GST is five per cent. Under Value Added Tax (VAT) all the raw material was taxed at the rate of five per cent except for the coloured paper. Higher rate of taxes have left traders in a difficult situation.

Some manufacturers have drifted away from this profession after the implementation of the GST as they did not want to get involved in the complex taxation. Some are only dealing in the wholesale business and not engaged in the retail sale of kites this year.

Islam from Trunk Bazar said orders he received this year for kites were far less as compared to in 2017. “Before placing orders, dealers are asking me about my GST number. I am not aware about the GST and nor are my workers,” he said. “I have not received any bulk orders. All this is due to the GST. It is not the only case like mine. Most kite makers in the city are suffering due to new tax norms. Production has also taken a hit,” he added.

Another kite maker from the city, Usmaan said he had no idea about how to calculate the GST and file return. “Orders I received this year are minimal as compared to previous years. Dealers are asking us to get registered under the GST, but I don’t know the process,” he said. 

“Earlier, I had five to six daily wagers, but now only two are working for me because there is paucity of orders. If things continue to be the same then I will have to change my profession,” he added. “The manufacturing cost has gone up by 20 per cent due to which my production capacity has decreased by 40 per cent. Although prices have gone up, it has only helped us to bear the hiked production cost. There are no profits. It has become almost impossible to continue in this profession,” said Ashok Kumar from Trunk Bazaar, who also is in kite making business. 

Meanwhile, there are some, who have distanced themselves from kite manufacturing and selling after the application of the GST. 

 “It was difficult for me to understand the complex system of the GST. As it is not possible for me to go to chartered accountant to get my returns filed so, I switched to another profession,” said Saajid, who was in kite business earlier.

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