Government silk outlets in the city have seen a dip in sales post GST

By Antara Kumar

Silk sarees with the Silk hallmark, in the Karnataka Silk Emporium


Bangalore, 31st August, 2017

Mr. Munirathnam, the managing director of the Karnataka Silk Emporium, said the sale of silk sarees usually crossed Rs. 15 lakh during the Varamahalakshmi Festival every year. This year, the sale did not even touch Rs. 5 lakh.

“We normally provide 30% to 40% discount in pure silk products during the festival. In spite of that there was no business at all, compared to the regular sale during the festival,” Mr. Munirathnam stated.

“Wholesalers and manufacturers have not reduced the rates of the products. The amount of tax a customer had to pay for readymade garments before GST was only 5.5%. Nowadays, on pure silk products costing below Rs. 1000, one is charged 5%, and 12% on products with a price tag of above Rs. 1000,” the manager was quoted as saying.

Munirathnam, who has been running the government store for about 20 years, said that GST has been a source of confusion for both sellers and buyers. He thinks that it might take about six months to a year to get back to business as usual.

However, private silk retailers seem to differ. M. Vijayashekhar, the director of Deepam Silk store on MG Road, stated that GST has not had much of an impact on the sale of silk-products.

Mr. Munirathnam, the managing director of the Karnataka Silk Emporium

He contended that people who can afford to buy their sarees can afford the extra tax, too.
Other stores like Mysore Saree Udyog, and Vijayalakhshmi, too, have not seen much of an impact.
Silk Weavers had voiced apprehensions about the impact of the GST on silk products, through its various processes.

“Karnataka aims to produce 28,000 metric ton of silk by the end of 2020. Silk is a high-value item and the sale of silk products has always been great. But after the price hike, the number of customers has definitely decreased,” said Shri H. Rudranna Gowda, a scientist in charge of clarifications on GST, at Central Silk Board.
P. Kumaresan, another official-in-charge of clarifications of GST in Central Silk Board, agreed with the views of Mr. Munirathnam. Kumaresan said, “There is 5% tax on pure silk fabrics, and 70% of silk fabrics is made in handlooms. Handloom weavers are saying that it will affect the industry.”

“The price hike is huge and it is difficult to buy silk sarees presently. Some sellers are providing offers during the festival, but without any discount it is simply not possible to purchase one or two silk sarees,” said Poornima JB, a customer at the store.

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