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High VAT giving tough time to local kite makers
December, 10th 2015

Local kite manufacturers are facing a tough time due to high rate of Value Added Tax (VAT) imposed on kites.

VAT imposed on kites is 14.30 per cent making it difficult for kite makers to carry forward their business.

“The profit margins in the state have reduced to minimal due to high rate of taxation. Left with no other option, kite makers, who were carrying forward the profession from generations, have started shifting to other vocations. A few years ago we used to earn some good bucks during the festival season, but now, the profits have reduced to negligible,” said Usmaan, a kite maker from Trunk Bazaar.

Not only this, retailers, too, have moved towards neighbouring states for buying kites but the kites damage during transportation as a result they, too, have to face losses.

If retailers buy kites from the local market they have to pay a heavy price and if they choose to buy it from the neighbouring states, they suffer losses due to wear and tear.

“Both manufacturers as well as retailers are in a fix owing to high rate of VAT. Kite makers suffer as there are no buyers and retailers suffer because the kites they bring from neighbouring states suffer wear and tear during transportation,” said Dheeraj Kumar, a kite trader.
“Profit has slipped from our hands since the imposition of VAT. Local product is priced higher due to imposition of VAT as a result, wholesalers and retailers have started procuring the product from other states, thus manufacturers are going into losses,” said Rakesh Chand, a kite maker and the member of State Kite and Dor Association.

He said the state government should promote small scale and cottage industry but it was doing just the opposite by burdening them with high rate of taxation. “Charging VAT on a handmade good is unfair and no other state in the country has imposed VAT on kite,” he said.

“Kite making is a profession of the poor and impossible high rate of tax is not a wise decision by the government,” he rued.

“Kite making is a seasonal occupation and sales peak during January and August. Earlier, we used to record good sales for two months, but now, the period has been shortened to only 15 days. Presently, we are only catering to local demand, while earlier kites were also bought by retailers and wholesalers from neighbouring states,” said another kite maker from the city.

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