Bengaluru

‘Sales down 50% in Deepavali season’

Consumers purchasing earthen lamps at Malleswaram on Thursday.

Consumers purchasing earthen lamps at Malleswaram on Thursday.   | Photo Credit: V Sreenivasa Murthy

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Traders blame e-commerce sites whom they accuse of manipulating prices to avoid higher GST slabs

Every Deepavali, hundreds of people throng Chickpet in pursuit of last-minute deals. However, this year the markets in the shopping hub were deserted and many shops had downed shutters.

Usually, during this time of the year, there is a huge demand for garments, flowers and puja items. But vendors and wholesale traders say that business has fallen by 50% compared to last year, which they blame on competition from online sellers.

Imat Ram, a garment trader in Chickpet, said, “Since Dussehra, we noticed sales that have only been going down. This is the case across Karnataka.”

Many traders blame less cash flow in the economy. They also cited a deficit of jobs in the market and people not spending as much as they used to, which is translating into a reluctance to buy products at maximum retail price (MRP). Potential consumers are turning to e-commerce platforms, which are offering huge discounts on the MRP.

The Confederation of All India Traders’ Association (CAIT) had recently taken to Twitter to comment on what they claimed were unfair trade practices of e-commerce companies. According to them, these companies pay a lesser amount of GST on products above ₹1,000.

Modus operandi

The government has issued a rule that a GST of 5% will be levied on products below ₹1,000 and 12% on products worth ₹1,000 and above. Small-scale traders sell their products at MRP inviting 12% GST on products above ₹1,000.

Online sellers offer massive discounts, which brings down the price below ₹1,000 and puts the product in the 5% GST bracket, traders allege.

The CAIT has asked small-scale traders and manufactures across the country to urge the government to protect their interests.

“We cannot keep up with online sites. Among other things, they offer multiple payment options, which we cannot,” said a flower vendor at Chickpet.

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Printable version | Dec 12, 2019 8:06:00 PM | https://www.thehindu.com/news/cities/bangalore/sales-down-50-in-deepavali-season/article29788382.ece

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