Rajouri Garden's marble market in West Delhi blames higher VAT, poor infrastructure for downslide
May, 12th 2012
Business is not so smooth at Rajouri Garden's marble market - the biggest in the capital - which is losing out its business to Rajasthan. Prime reasons are comparatively higher value added tax (VAT) in Delhi and deteriorating infrastructure which aggravated the problem for the traders.
"In Delhi, VAT which levied on sale of marbles and tiles stands excruciatingly high at 12.5 percent. In neighbouring Rajasthan it is a mere 5 percent," said Sandeep Bhardwaj, president, Delhi Marbles Dealers Association.
The Rajouri Garden market has been a preferred destination for the customers from in and around Delhi for over two decades primarily for its wide range of marbles, granites, sandstones and ceramics that it offers.
"The market provides to the necessities of every kind of customer - from low-end to high-end projects - such as the airport, metro stations and big housing complexes," said Subhash Aggarwal, owner of Amit Marbles.
VAT the EFF
However, over the past few years, higher VAT has been the most worrying factor that has plagued the marble business of West Delhi. Customers are now getting lured to relatively cheaper prices and better deals at markets located in Kishangarh and several dealers at Jaipur both of whom are easily accessible.
For instance, a trader from North Delhi who wishes to buy 2000 sqft of Italian or Turkish marble ranging between Rs 100 and Rs 400 per sq ft (depending upon quality) from Rajouri Garden, the net price will cool down to Rs 2,30,000-9,05,000, including the 12.5 percent VAT and transportation costs involved.
However, buying the same material from Rajasthan, with central sales tax (CST) at 5 percent and transportation charges at Rs 15,000, the net price comes at Rs 2,25, 000-8,55,000, saving the trader Rs 5000- 50,000 in comparison with the Rajouri Garden market. Basic wholesale trade thumb rules, of more savings on more quantity or amount of units purchased apply as usual on purchase.
Ruing over the loss of business and a missed opportunity to cash in on the lucrative real estate sector of Delhi, Bhardwaj said, "I think that our requests to Delhi's finance minister AK Walia and Member of Parliament Ajay Maken have fallen on deaf ears." Treading the similar line of thought, Ghanshyam Sharda, general secretary, Delhi Marbles Dealers Association, said that the proposal for reducing VAT on a trial basis even for a year didn't get any response from the state government.
"Our meetings with Mr Walia on several occasions have ended without any progress and repeated hollow assurances from his side," said Mr Sharda.
Registering a win for the first time from Rajouri Garden seat in the just concluded MCD elections, he said, "The marble association members of Rajouri Garden have not yet come to me with their share of problems, but on a personal note, I feel that taxes should be lowered so that the business could flourish not only in my region but also elsewhere in the state."