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Mumbai: City's Ganpati mandals are the hardest hit by GST

Updated on: 24 July,2017 08:37 AM IST  |  Mumbai
Chetna Sadadekar | chetna.sadadekar@mid-day.com

This year, not even Ganpati is exempt from the new Goods and Services Tax (GST). With prices of raw materials and transportation going up, state government ropes in CAs to guide organisers through the process

Mumbai: City's Ganpati mandals are the hardest hit by GST

While Ganesha idols have become more expensive because of a rise in cost of materials, sculptors are not sure whether they are supposed to charge GST to customers as well. Pic/Pradeep Dhivar
While Ganesha idols have become more expensive because of a rise in cost of materials, sculptors are not sure whether they are supposed to charge GST to customers as well. Pic/Pradeep Dhivar


This year, not even Ganpati is exempt from the new Goods and Services Tax (GST). Ganesh Chaturthi is just a month away, and the city's mandals are struggling with a 20 per cent rise in costs - not only have Ganesha idols become more expensive because of the tax on raw materials, but mandals will now also have to pay higher tax to hire the decorators who create larger-than-life pandals.


Sculptors are paying more for raw materials and transportation due to GST, and will pass on this burden to buyers. Pic/Satej Shinde
Sculptors are paying more for raw materials and transportation due to GST, and will pass on this burden to buyers. Pic/Satej Shinde


Devotees who have already placed orders for their idols will have noticed that GST has made it more expensive to take Bappa home this year. But the hardest hit are the Ganpati mandals, which commission the biggest and the best idols in Mumbai.

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A 15-foot idol that cost about Rs 80,000 to Rs 90,000 last year, now costs at least R1.05 lakh. This is because of a rise in the cost of materials like Plaster of Paris, coir and paints - all more expensive because of GST.

Naresh Dahibaokar from the Brihanmumbai Sarvajanik Ganeshotsav Samanvay Samiti, an association of mandals, said, "We had requested the state government to reduce the tax burden on raw materials required for making idols, but there was no response. So, there is likely to be an increase of about 20 per cent for those who have booked their idols after July 1. While there is a trend of increase in idol prices by about 10 per cent every year, this year the increase in price has doubled, owing to GST."

Double impact
But that's not the only place mandals will have to cough out more money to the taxman. This year, the organiser will also have to pay GST while hiring decorators who deck up the pandals, therefore providing a service. Until now, mandals would pay service tax at 15 per cent, but from this year, it will increase to 18 per cent under GST.

They will also have to pay more to any other vendors for food, flowers and other requirements. Swapnil Parab, secretary of Lalbaug Sarvajanik Utsav Mandal (Ganesh Galli), said, "We will now have to bear the burden of additional tax that is levied upon us by the vendors. And if the vendors are also paying more because of GST, we will have to bear that cost too. This will definitely pinch our pockets, and the total impact will be known to us only after we audit our accounts and compare it to last year's books."

Confusion
With just a month left, there is still a lot of confusion among mandals and sculptors as to how the GST applies to them.

Also read - GST will benefit small traders more: Narendra Modi

Vijay Khatu, a famous Ganesh idol sculptor in the city, said, "Before this year, we never levied service tax on the buyers, but we are unclear whether we will have to charge GST or not. Owing to GST, the cost of materials and transportation has also gone up, and this has already led to an increase in idol prices."

Akhil Sarvajanik Ganeshotsav Mahasangh, a coordinating committee between the mandals and the government, has appointed chartered accountants to explain the impact of GST on Ganesh mandals. "We have recently appointed CAs to talk to mandals and clear their confusion in the matter. These CAs will directly resolve the concerns of Ganesh mandals worried about GST," said Suresh Sarnobat, secretary of the committee.

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