Traders benefit from removal of GST on Rakhi this year- Rakhi gets a makeover with glass, beads & stone

Last year, Rakhis were removed from GST quite close to the festival, which did not give any special benefit to the traders, but this time the manufacturers and traders had a full year to prepare for the festival.

Highlights

• Traders’ sales increased compared to last year, but online platforms are earning more profit
• Till last year, glass beaded Rakhis were taxed at 18% and brocade, nylon, and silk up to 12%.
• After the abolition of article 370, Kashmiri touch and colours of Indian tricolour etc. can be seen on Rakhis. PM Modi Rakhis are also being sold in the market.

This year New Delhi markets are looking bright with colourful Rakhis adorning the shops after all types of Rakhis were exempted from GST. Traditional Rakhi makers and dealers have used glass, beads, and stones to a great extent in making of Rakhis this year. Sales are also reported to be 20% higher than last year. However, e-commerce and gifting platforms are earning well in the midst of the growing online demand for Rakhis. They have recorded 40% growth in orders this year. 

According to Anil Bhai Rakhi Wale, from Sadar Bazaar which is the wholesale hub of the Rakhis, last year Rakhis were exempted from GST right before the festival, which did not provide any special benefit, but this time the manufacturers and traders had a full year. This has a positive impact on sales. Prices have also come down.

Till last year, glass beaded Rakhis were taxed at 18% and brocade, nylon and silk Rakhis were taxed at 12%. The rates were fixed according to the raw materials and input rather than any special slab, which had many irregularities. This year everything is clear and manufacturers have used glass, plastic beads, stones and other studded items indiscriminately. 

Rakhi manufacturer and dealer Shobhit Aggarwal said that wholesale sales were up 20% this year. Demand from online vendors is increasing year after year. He said that e-commerce platforms are offering many types of add-on services besides sending Rakhis, and are charging many times more than the original price of Rakhi from end consumer. He said that his profit margin is higher on Rakhis. 

Gifting platform Ferns N Petals has launched Rakhi delivery service in more than 100 countries this year. A company spokesperson said that orders have grown by 40% over the past year, with 50% for countries like the US, UK, UAE, Singapore, Canada and Australia. Demand for all types of Rakhis including Lumba, Mauli, Silver, Pearl, Rudraksha, Chandan has increased. Ferns N Petals on Rakhi is expected to do a very good business as compared to last year.

Article 370 
With Raksha Bandhan and Independence Day coming together, the impression of patriotic theme is clearly visible on the Rakhis. According to Sadar Bazar dealer Mayur Gupta, the craze of Modi and tri-colour Rakhis has increased in the markets. After the abolition of Article 370 in Jammu and Kashmir, the way national sentiments are taking hold, traders have also started giving Kashmiri touch to the Rakhis to show national unity. They are experimenting with tri-colour, PM Modi and Kashmir with Rakhis.

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