Steep hike in prices of crackers keeps customers away

This is the first Deepavali since the introduction of GST, which is 28% on crackers

People buying crackers on the eve of Deepavali in Tiruchi on Tuesday.

The sale of firecrackers has gone down by about 25% this year when compared to last year due to steep hike in prices and the impact of Goods and Services Tax.

This is the first Deepavali for the traders and customers since the introduction of Goods and Services Tax (GST), which is 28% on crackers.

Several traders, who used to set up temporary stalls to sell crackers in Deepavali season, have opted out this year primarily due to implementation of 28% GST on crackers as they feared of netting huge lose.

As against 110 cracker shops started in 2016, this year just about 70 shops in the city have been set up. It was said that traders, who were unsure of the impact of business in the post GST period, did not want to take risk.

Tough regulations on extending license to crackers shops and godowns was also said to have played its part in driving away traders from establishing cracker stalls.

Tuesday, the penultimate day of Deepavali, witnessed huge crowd in front of cracker stalls in the city as the customers indulged in last minute shopping.

However, many of them expressed shock over steep hike in prices of crackers. The prices had gone up by 60 to 70% than last year.

Not many customers were given receipts with 28% GST component.

They were merely given written estimates.

For example, the price of a box of ground chakra was being sold for ₹180 on Tuesday in a cooperative store.

It was ₹100 last year.

The cost of a bundle of small size Laxmi crackers (25 numbers) was being sold at ₹1,100 which was ₹650 last year.

The customers had to pay almost double in private stalls than cooperative stores.

While admitting that the prices had gone up to a great extent a trader said that prices were inclusive of 28% GST. The burden was ultimately passed on to the customers.

Traders say that the cracker sale has gone by 50% this year. Economic sluggishness, negative impact of demonetisation and high rate of GST are among the reasons for the dip in sale of crackers.

V. Govindarajan of Tamil Nadu Vanigar Sangangalin Peravai said that just 70 crackers shops had been established in Tiruchi as against 110 last year. It meant that the business of 50 traders, who opted out this year, should have been passed on to others. However, it has not happened.