The Rs 1700-crore sports goods industry in Jalandhar has seen a 90 per cent drop in daily sale after the July 1 GST rollout. Industry insiders attributed the drop to confusion over the new tax regime and also the spike in prices with different sports goods being taxed between 12 to 28 per cent in comparison to 6.05 per cent tax on most items earlier. Industry representatives have now decided to meet BJP high command soon with a plea to bring down the tax rate.
Jalandhar caters to 55 per cent demand of sports goods in the country, with the industry’s domestic market being Rs 1300 crore, and exports being around Rs 400 crore. It gives direct or indirect employment to nearly 50,000 people. Nearly fifty per cent of the city’s sports goods industry is run by small and medium manufactures, who are mostly unorganised. This segment, which is used to selling goods in cash, has been confused over the new billing process.
“Out of the domestic market, around Rs 900 crore market is run by small and medium unorganised manufacturers, majority of which were exempted from even excise duty earlier…They are small manufacturers who run across the country to sell their goods and earning only enough to meet their basic needs,” said Ravinder Dhir, President Punjab Udhyog Veyopar Sena, adding that now they would come under tax regime directly or indirectly either at the time of selling or purchasing the raw material.
“Most of them would face huge losses and become unemployed ultimately as GST will favour big sports houses while these small manufacturer will be out of the industry,” claimed Dhir. An employee at the Montex showroom in Basti Nau area, which is s famous sports market, said: “We are sitting idle for past three days as all are confused and there is no demand for any sports item be it cricket bat, football, volleyball, badminton racket etc…”
Vijay Kumar, who is a manufacturer and trader of shuttles, footballs, and gym equipment said there is around 90 per cent dip in the demand as even big buyers are not placing orders at the moment. He added that goods were also not being sold right now due to confusion over the tax system.
“We have decided to meet BJP high command as there is no use of meeting Finance Minister Arun Jaitley,” said Dhir, adding that earlier they were assured that taxes would remain at par on sports goods even after the GST. “Earlier we faced huge trouble during demonetisation and now GST has added to our troubles,” said shuttle manufacturer Anil Kumar. He said that his raw material supplier was not clear about how to sell the material as of now, adding that ultimately consumers too will feel the burden of costly items due to high tax leading to less orders overall.
Sohan Ram, a worker at a shuttle making unit, said that his entire family, including his sons, stitch football to earn their living, but they were struggling to get work for the past few weeks in run up to GST implementation. A big sports house owner of Jalandhar, who requested anonymity, said that small manufacturers will have to follow GST rules or close business.