Kerala: GST pinches Christmas sales
18 percent tax on decorations, cakes instead of 5 percent earlier.
Kochi: Christmas is just couple of weeks away, but the usual shopping frenzy and celebration is missing. Confusion over enforcing GST has affected the Christmas market. While malls and big shops register gradual increase in sales, traders in Broadway and other commercial centres did not register any increase in sale for Christmas products. There has been increase in price of cakes, cookies and other delicacies which are in high demand during the festival season.
Every year, Christmas sales begin by the end of November, but this year, the business is yet to gain momentum. Though sale of stars, decorative items and cakes has started picking up in big shopping malls, the usual shopping frenzy is absent. Small shops in Ernakulam Broadway have registered sharp decline in sales. The GST rate on stars, decorative items, cake and other products is 18 per cent. It was just 5 per cent earlier.
“Due to concerns over decrease in sales, traders have not stocked decoration items imported from China. Numerous types of colourful and trendy LED Xmas stars and other decorative pieces which were in high demand during previous years are not seen in many shops. Medium and small scale traders are the worst affected while big shopping malls are offering big discounts,” said Jose Pallipadan, a trader from Edappally.
Biju Joseph, owner of Navya group of bakeries said that the GST has badly affected the sales. “Post GST enforcement, business is dull as the increased tax has reflected in the price of Christmas delicacies. Usually, we start to get bulk orders from November itself. But this year, there are not many orders. People are reluctant to spend citing sharp price increase,” he said.
Fearing decline in sales, small groups selling homemade cakes, cookies and pastries have cut down production. “Unlike previous years we are not getting many orders for cakes and cookies. Though we have to pay 18 per cent GST for ingredients, we can’t impose the same rate on delicacies as the turnover is less than Rs 20 lakh,” said Viji C., a housewife.