News

Jul 31, 2017

Little or No Impact of GST on IIJS 2017

One apprehension amongst many, prior to the commencement of the India International Show (IIJS) this year was the possible impact of the newly introduced Goods & Services Tax (GST) on the show.

However, once the show started, from Day 1 itself, the crowds thronging the aisles and stalls made it clear that visitors were not daunted. Both footfall and business this year at the IIJS -- which comes as a good buying and stocking opportunity for retailers across the country to prepare for the festive and marriage season – seems to have accelerated. 

Talking to exhibitors across the various Halls also revealed that the GST had had little or no impact on the business at the trade fair.

“Indians are very practical and business minded people,” said one loose coloured gemstones exhibitor.  “They will always find a way to do business.”

Ahmedabad-based Soni Nanala Bechardas Jewellers Pvt. Ltd, branded as NBJ, are manufacturers and wholesalers of traditional antique gold jewellery, crafted in hallmarked 22kt  gold. Sneh Soni, scion of the family said, “We have seen no impact of GST on the IIJS. The impact of GST on prices for the end consumer is marginal – a mere 1% -- as earlier buyers were paying 2% and now they are paying 3%. And for the trade, in many instances they will also be getting refunds. Gold prices have also been stable. As a result business has been good. We are getting many inquires.”

Soni opined that on the contrary, GST would be beneficial to a business like his. “Now there is one clear tax,” he said. “Earlier, each state had different taxes, and every time you crossed state lines to sell jewellery, you had to take that into account.”

Soni added: “The only difference now is that everyone will have to do business with those who are operating in an organised manner and maintaining proper books of accounts. We have been organised from earlier itself, so we do not find it difficult.” 

“The GST is a fait accompli and everyone knows it is here for good,” said one loose diamonds and diamond jewellery exhibitor who did not want to be named. “So people have taken it in their stride. At the most it is a question of going through one cycle, then everything will settle down. But it is not having any impact on business at the show as such.”    

Mansukh Kothari of Vasupati Jewellers – who is also part of the GJEPC’s Committee of Administration (COA) - stated categorically: “There has been no impact of GST on the show. It is only a matter of adopting the system and the industry is open to doing so and has welcomed the GST.”

The gold jewellery section was particularly packed. In fact, so  inundated  were the large gold chain and jewellery manufacturers, that it was impossible to speak to responsible company persons as they were busy catering to customers. And their stalls were filled to capacity with buyers.

“In fact this year there seem to be many more walk-ins that in the past two years,” observed Soni – his view echoed by many exhibitors.   

Many manufacturers in the machinery section expect demand to pick up once the GST system settles down. Most of them based this expectation on more or less the same factor – the reduction of input credit which would lead to an overall reduction on the tax burden on end buyer.

“With the introduction of GST, there will be some benefits for the end buyer,” opined Kanchan Jana, RSM, Fischer Measurement Technologies (I) Pvt Ltd. “Though the total tax for the machinery that we sell (for metal purity checks, composition analysis and other measurements) at 27% remains the same as the VAT + excise, and overall price the end user pays will not change, the buyer will now get the benefit of input credit (up to 18%) to offset against the total tax liability.”