Shopkeepers, wholesalers say profit margin has come down compared to previous years.
Mumbai: Despite Diwali being just around the corner, traders, shopkeepers and wholesalers are facing a slump in business due to the implementation of the Goods and Services Tax (GST). They have claimed that their profit margin has come down this year compared to the previous years, because of five per cent of GST being charged on garments and clothing of up to Rs 1,000 and 12 per cent beyond that. Though the GST rates have changed for a few items recently, the traders said it would not immediately reflect on Diwali sales.
The implementation of the GST regime has an adverse effect on festive shopping and the clothes market has taken a hit, leaving retailers unhappy. Hanif Agwan, wholesaler-retailer of Ankar Duppatta House, Dadar, said, “Due to GST the prices of dresses and materials have shot up. The market has been in a slow down post-demonetisation and GST implementation, and I don’t have customers like I did last year.”
Irshad Ahmed of Aarohi Collections, Dadar, who supplies dresses to markets and big retailers, also said business is badly affected. Mr Ahmed said, “My store used to be loaded with customers, but that is not the case. Also, the business between us and retailers is on credit system. They take the garments and return a few if they aren’t able to sell them. Now with GST in place, we have to record and account for the garments given to the retailers and those that they return. This has increased our compliance of GST and hence the retailers are buying in small quantities.”