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GST continues to confuse: Old Delhi shopkeepers wonder if rakhi is taxable or not?

Old Delhi’s Sadar Bazar — the biggest wholesale market in Asia — is witnessing a dip in the sales of rakhis, this year and the shopkeepers are blaming GST (Goods and Sevices Tax) for the confusion.

delhi Updated: Aug 03, 2017 10:39 IST
Ruchika Garg
Ruchika Garg
Hindustan Times
GST,Rakhi,Sadar Bazar
Shopkeepers in Sadar Bazar, Old Delhi blames GSTfor the declining business. (Manoj Verma/ HT Photo )

Raksha Bandhan is around the corner yet the busiest market of Old Delhi, Sadar Bazar, looks like a deserted market this year. The shopkeepers blame the newly introduced Goods and Services Tax (GST) for this decline in business.

“I have been in this business (of rakhis) for the past 20 years but I have never seen such a low,” says Jitender Gupta, a trader. He adds, “By now, we usually [end up] selling half of our stock, lekin is baar ek-tihayi bhi nahi bika hai. All because of GST confusion. We can’t issue bills as we have no clarity about HSN code (Harmonized System Nomenclature) number that should be on these rakhis. Many of us have not even got our GST numbers! The whole process has affected our sales severely.”

Earlier, rakhis were called Raskha Sutra or Kalava (like sacred Hindu thread Moli) and its HSN code was given accordingly. After GST, shopkeepers are clueless about the code that should be on rakhis, and are unable to find the same in HSN code searches engine. “Main pura maal ek number mein lene aaya tha, lekin code ki confusion ki vajah se mujhe bill nahi mil paya. (I came to Delhi to buy rakhis in bulk quantity in cash but due to the confusion of GST code, I wasn’t given a bill for it.) I have come from Jaipur, and [for me] visiting Delhi again this week won’t be possible. So, for now I have bought a little stock but there’s hell lot of confusion,” says Manvinder Kumar, a customer.

The shopkeepers in Sadar Bazar are angry and disappointed that the introduction of GST has hit their businesses. But above that, most of them are in dilemma if rakhi comes under taxable goods or not! “Until last year, there used to be no tax on rakhis, and after GST there’s no clarification on which tax slab it falls in,” says Shayam Mittal from Shayam Rakhi Bhandar, adding, ”Rakhis were tax free until last year but we have no clue about this year, since GST has come into effect. Though the festivity and goods tax slab is 28 per cent, but we don’t know if rakhis are under this slab. The worst is that even my chartered accountant is confused about it.”

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First Published: Aug 02, 2017 18:28 IST