Rakhi rates soar despite no GST

Neha Basudkar
Sunday, 19 August 2018

GST on raw materials is a cause of concern for wholesalers

Pune: Even after the government announced Goods and Service Tax (GST) exemption on rakhis, their prices continue to be on the higher side, as the raw materials used for making rakhis continue to be sold with GST. 

The wholesalers in Raviwar Peth, Bhori Ali share that after the implementation of GST last year, their seasonal business of selling rakhis is badly affected.

This year, the Raksha Bandhan will be celebrated on August 26.

During a spot visit at Bhori Ali, the wholesalers engaged in this seasonal business from past few years claimed that GST continues to affect their business.  

Rahul Pawar, a wholesaler, said, “Despite the fact that rakhis have been exempted from GST, the GST is charged on other raw material like thread, mani, fancy stones, box packing, plastic, kundan and other such products. So ultimately rakhis become costly.” 

Sachin Padwal, a wholesaler of rakhi at Bhori Ali, said, “A dozen rakhis, which were being sold for Rs 10 to Rs 15 earlier, are now being sold at Rs 25 to Rs 30 after the implementation of GST, i.e, from last year. Since last year, our business has drastically reduced. This was mainly because almost 90 per cent of the rakhis come from Kolkata, Indore, Jodhpur and Mumbai, we had to pay 18 per cent GST on it and the rest comes from Dharavi in Mumbai and other pockets of Pune and its surrounding areas, which were not taxable.”

“Fancy rakhis arrive in Pune from Kolkata, ‘latkan rakhis’ arrive from Jodhpur, Jardosi types of rakhis come from Mumbai, fancy and cartoon types of rakhis are exported to Pune from China,” Padwal added.

Another shopkeeper Siddharth Adhav, said, “Last year when GST (Goods and Sevices Tax) was charged on rakhis, we had reduced bulk purchase. We had purchased only local rakhis, as we knew that people will not shell more than Rs 20 for a rakhi.”

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