GST woes: Come Uttarayan, fewer kites to flank Allahabad skies

GST woes plague the small time manufacturers who are struggling to comply; prices up 35%; production down 40%; shipments to other states down too

Come Uttarayan (January 14), fewer kites would flank the Ahmedabad skies — kite makers here, a largely unorganised industry, say that this year production is down by 35-40 per cent right ahead of the Kite Festival. Manufacturers complain that complications due of the Goods and Services Tax (GST) have thrown the micro and small enterprises (largely home-factories) out of gear — while the input costs and as a result the prices of kites have gone up, orders from outside Gujarat have also shrunk. 

Gujarat celebrates the Makar Sankranti (Uttarayan) in full fervour — with millions flying kites in mid-Jan. In fact, an International Kite Festival is celebrated by the Sabarmati Riverfront in Ahmedabad which sees participation from several countries. This year none other than Prime Minister Narendra Modi is expected to host the Israeli PM Benjamin Netanyahu at the Ahmedabad Kite Festival before they proceed for bilateral talks in Delhi. 

The situation on the ground is not so vibrant, however. 

Pappubhai Patangwala who runs a kite shop at Kalupur Tower area of Ahmedabad explained, "There are around 7,000-8,000 workers in this industry in Ahmedabad alone who work in roughly the 1,000 odd kite making factories here. The kites business is hardly for two months of the year and most of these factories are run as home enterprises with the women and kids chipping in to make some extra money. These people are finding it difficult to comply to the GST regime." 

Pappubhai further claimed that most of these factory owners actually take loans (from informal channels mostly) to procure material for kite making. While the material itself has become costly (with a 12 per cent GST on coloured paper, 5 per cent on strings and 5 per cent on sticks), the small time factories are finding it difficult to procure raw material in bulk as most of them do not have GSTN. The sticks (kamandhaddha) are procured from Kolkata, and GSTN is playing a spoiler there as well, claimed dealers here. 

"On top of this, there is another 5 per cent GST on kites. There was no tax on kites earlier. This has pushed prices up by around 35 per cent or so," Pappubhai claimed. 

Apart from higher prices, the difficulty in compliance has affected kite production in the state. Ahmedabad alone makes around 500,000 kites per day and another 400,000 to 500,000 kites are made across the state (Nadiad, Khambat, Bharuch and Surat being major belts). 

Makers allege this year production is down by at least 35- 40 per cent. Salim Rasulbhai, another kite dealer from Kalupur is, however, hopeful that as the season progresses, demand for kites will pick up in Ahmedabad and other parts of Gujarat despite higher prices. "The bigger concern is, shipments to other states have dropped significantly as transporters refuse to pick up consignments without GSTN. Around 50-60 per cent of the production from Ahmedabad goes out to cities like Mumbai, Pune, Nashik, Hyderabad among others. This year it is down only 30 per cent of the production is being shipped," he added. 

Many states have taken cue from Gujarat's kite flying festivals and have started their own, thus spiking demand for kites. "Telangana, for example is hosting its own kite flying festival from January 13 to 15. We are participating in the Ahmedabad festival (January 7 to 14) till January 11 and then our team of professional kite flyers would move to Hyderabad," informed Paavan Solanki, president of Royal Kite Flyers Club here (which has 100 national and international members) and also the advisor to the Telangana festival. 

Festival kites, however, are made to order and are usually customised as per the professional flyer's requirement and are not a part of the small-scale kite industry as such.