HYDERABAD: Ahead of the Navaratri festivities, there has been a considerable drop in the sales of Durga idols this year and artisans are clueless as to the reason for the drop in demand. This festival season, over 40 per cent of the Durga idols remain unsold at Dhoolpet, which, the artisans say, is a “never seen before” phenomenon.Adding to the low demand for idols is the rise in the cost of raw material post Goods and Service Tax implementation. To keep market prices of idols low, artisans have even lowered their profit margins now.
“There is not much demand for Durga idols this year. Over 40 per cent of the idols are yet to be sold with hardly a week left. This is unusual, Ganesh idols too had low demand this year,” said Kishen Singh, an artisan of Gokul Enterprises Limited Dhoolpet. Hence, artisans are preparing to be left with a large unsold inventory. The upkeep of unsold idols involves high maintenance cost. “We have to keep them for a year safe from rain and damage. Besides, the storage area rent is increasing,” said. The recent drive against illegal encroachments in the Dhoolpet area by Greater Hyderabad Municipal Corporation (GHMC) has resulted in the shrinking storage spaces for the idols which, in turn, is pushing rental rates up, he added.
“Our profit on any idol, which used to be 20 to 30 per cent, has come down by nearly half this year, and we had to slash the prices — mostly of smaller idols — due to low demand,” said Rajesh Singh, another artisan. “The price of an idol depends on its size. But, for an idol that had cost `2,000 earlier, we have slashed the price to `1,300 to `1,500. If the idols remains unsold, then it will be a total loss to us,” he added.
GST impact: To make a Durga idol, an artisan mainly uses plaster of Paris (PoP), jute, white cement and paint along with an assortment of materials that are used depending on the size and design of the idol.
To the surprise of many artisans, these items are now taxed under different GST rates. For instance, VAT on PoP was 5 per cent in the past and now it is 18 per cent. Other materials too have witnessed a hike in tax rates.“Ideally, we should pass on the added cost to the customer. The sales being already low, a higher price will further dampen our business. We may lose business to a competitor who is willing to sell cheaper,” said Rajesh. If idols remain unsold this year, fewer idols will be made next year, which means fewer jobs for artisans in the next festival season,” Rajesh added.
Breakdown of tax paid by artisans at Dhoolpet
Raw material Pre-GST Post-GST
Plaster of Paris (5 % VAT) (18 % GST)
Cloth (Nil VAT) (12 % GST)
Decorative items (Nil tax) (18 % GST)
Paint (14.5 % VAT) (28 % GST)
Rent (15 % service tax) (18 % flat GST)