GST a heavier burden than demonetisation, say Ludhiana sweet shop owners
Even as they had barely recovered from losses after the note ban, the new tax regime has plucked away the customers visiting their shops during summer.punjab Updated: Aug 03, 2017 15:54 IST
Your love for sweets will cost more with the implementation of the goods and services tax (GST) increasing their price by up to 15%.
Already in the grip of demonetisation-induced shortfall in demand, the confectioners and sweet shop owners say the GST is a heavier burden to bear. Even as they had barely recovered from losses after the note ban, the new tax regime has plucked away the customers visiting their shops during summer.
There are around 2,500 sweet manufacturers in the state of which 350 are in Ludhiana alone. While there was no tax on sweets in the state earlier, now manufacturers have to bear 5 to 12% GST. As such, the prices of various sweets, such as “barfi”, “ladoo”, “pinni”, “milkcake”, “boondi”, “gulab jamun”, “imarti”, “kaju katli” and “sohan papdi”, have increased between Rs 20 and Rs 50 per kilogram since the GST rollout.
With this, sweet shop owners say, customers are barely turning up now, causing a major dip in the sales this year compared to the same time last year.
While the price of one kg “barfi” was Rs 250 earlier, with GST its price has increased up Rs 280 now. The prices of other sweets have also increased,thereby triggering the middle class buyers to prioritise their basic necessities over buying sweets.
Narendar Pal Singh, president of Halwai Association of Punjab said, “The introduction of recent monetary policies by the Union government has affected the buying capacity of people. While the new tax regime has not hit the elite segment much, we have registered around 70% dip in our sales from what it was last year in the middle-class segment.”
“Shortage of labourers, high rate of tax on dry fruits and transition to the new tax regime can also be blamed for the lull in the sweets market,” Singh added.
Owner of a brand of sweets sold on Hambran Road, said, “With the acute shortage of demand in the market, it is not feasible to increase the price of sweets. So we have decided to slash the original cost of sweets, to draw customers to the market. Unlike demonetisation, where we could have recovered from losses till the completion of next festive season in winter, GST has posed serious risks to our business prospects until next year end.”