This year, it is going to be a dim Diwali. The whole nation is gearing up for Diwali – the festival of lights. The joy of Diwali celebration is not yet initiated this year due to GST effect on firecrackers. Already Supreme Court banned the sale of firecrackers in Delhi during Diwali. Now GST implementation is effecting the sale of firecracker all over the nation. The government levied 28 percent GST on firecrackers and it did not consider when the firework units demanded reduction of GST on fireworks from 28 percent to 12 percent or 18 percent. Compared to previous year, the Sivakasi Fireworks Association has cut down the production by 50 percent.
After the introduction of 28 percent GST on firecrackers, the prices shot over 30 percent high. Because of GST, the retailers are not coming forward to buy the crackers. Due to the lack of sale, the wholesale shops have no customer. The wholesale dealers bought the firecrackers in huge amount, but are now facing losses as there is no retail business. The firecrackers business is not yet started even though the festival is nearing. However, 28 percent GST will be added to the bill while the wholesale dealers purchase the firecrackers at Sivakasi. The wholesale dealers will try to collect GST from retailers and then retailers will collect the GST from the consumers. It is practically difficult to pay GST at 28%, especially when licensed units are facing tough competition from illegal manufacturers and illegally imported Chinese crackers. They do not pay any tax and their products are obviously cheaper and attract buyers.