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GST to make Diwali crackers cheaper

Tuesday - October 16, 2018 12:48 pm , Category : OPINION & INTERVIEW

WTN- One may tell a hundred things against GST and count its failures and problems, but thanks to the seminal tax reform brought by the government, this year Diwali crackers may not come as expensive as they were last year or in years before that.
 
What GST has done is to regulate the prices and ensure a uniform and justified pricing of the crackers. What happened so far was that manufacturers printed any MRP of their liking on the packets of firecrackers and left it to retailers and sellers to decide on the exact price they wanted to sell them for. For instance, a manufacturer might print Rs 80 for a piece of tubri which would retail for Rs 60 at one place, Rs 55 at another, and may be Rs 65 at yet another place.
 
The buyer thinks he has won a bargain and got the product cheap, but the actual price in the first place should not have been more than say Rs 40 going by the production cost and the ideal profit margin it merits. It was the manufacturers’ random pricing that decided the product costs till now. This is set to change from this year.
 
Due to the introduction of the transparent and centralised tax system now manufacturers won’t be able to fix a price at their will. They will have to print a valid pricing on the product which will be recorded in the system. The MRP at the retailer’s end will thus mean the MRP plus 18 per cent GST on it, which would be the end price to be paid by the customer. Since the MRP will now be a formal and justified entity, it will be much lesser than actually what used to be printed so far. And even with the GST amount added on the MRP, a customer will have to pay a much lesser amount than what he used to do earlier for the same product. Thus bringing the whole fireworks manufacturing and sales sector under a uniform and structured tax ambit has led to price correction and end to corruption in the system. This is one first majorly visible benefit of GST which we are going to reap the direct benefits of, this year. Cracker prices were skyrocketing every year, making it impossible for the middle class to celebrate Diwali unfettered.
 
There was no government regulation on their pricing and whatever the retailers decided, people had to comply paying up. There was no way to check the pricing irregularities unless the uniform GST tax structure was put in place. Even apart from crackers, other decorative Diwali products that people purchase in good quantities during this time of the year will see a price correction, offering greater affordability to the common man. Consumer is really the king this time and most of us can have a blast of a Diwali a fortnight down the line.

-Window To News
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