50% dip in sales: GST blues hit sports goods makers in Jalandhar

Traders and businessmen from the sports equipment manufacturing industry in Jalandhar have demanded rollback of the Goods and Services Tax (GST) rates, stating that their business has declined by 50% after the GST was rolled out in July last year.

Traders said their businesses were hit hard because of the confusion over the new tax regime. Apart from this, they said the spike in prices also contributed to the loss. They added that sports goods are being taxed between 12% to 18%, whereas earlier most sports equipment invited only 6% value-added tax (VAT).

“With the increasing price, our business has fallen by approximately 50%. The government should reduce GST rates on gym equipment and sports goods,” said Ravinder Dhir, president of Punjab Udhyog Veyopar Sena.

He added that recently, industry representatives met Punjab finance minister Manpreet Singh Badal and a memorandum was also submitted to the GST commissioner last Friday. “We have demanded a reduction in GST rates on sports good,” he said.

Meanwhile, traders complained that the demand of sports equipment, be it cricket bat, balls, football, volleyball or badminton racket, has declined.

Aman Arora, who runs a business of gym equipment, said, “The demand has sharply declined. Customers are not placing bulk orders even after six months of GST.”

Dhir, who also owns Dhir Enterprises, said, “In the pre-GST regime, we used to manufacture around 2,000 cricket bats every month. However, we are now manufacturing only around 1,000 to 1,200 bats per month. The actual demand is even lower than this,” Similarly, Vipan Preenja, owner of Marshall Export, said, “The cost of sports items has drastically increased because of the 18% GST on sports bag and shoes. Earlier, we used to pay only 6% VAT. Our sales have decreased by over 50%.”

He added that prior to the introduction of GST, his firm used to manufacture 2 lakh bag every month. However, at present, they hardly manufacture 80,000 bags.

Speaking on the issue further, Dhir said gym equipment should be placed in the 5% to 12% GST slab, against the present rate of 18%. Besides, sports items, including bags and helmets, should be in the 5% slab because these are meant for physical fitness and the profit margin is very low, he said.

“The government has reduced GST rate from 5% to 0.25% for cut and polished diamonds. But, the GST on sports equipment continues to be over 12%,” he said.

Meanwhile, traders claim that the sports equipment manufacturing industry in Jalandhar caters to approximately 55% of the country’s demand. The industry is estimated to be worth Rs 1,800 crore and provides employment to nearly 50,000 people.


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