Courtesy: India Today

GST, stringent rules, SC ban, Chinese crackers to kill Sivakasi fireworks industry this Diwali

According to several manufacturers in Sivakasi, GST has sent them tumbling into huge losses. Chinese crackers have taken over the market and the recent SC ban is bound to dim the lights of the fireworks industry.

As the entire nation gears up for the festival of lights - Diwali, the town of Sivakasi will be lit too, but dimly this year.
Sivakasi is famous for its matches, printing and fireworks. These jobs keep close to eight lakh people employed. The fireworks factory alone employs around three lakh people and another five lakh people are employed in subsidiary industries such and printing and packing.

The yearly turnover amounts to upto Rs 4,000 crore. This Diwali, however, many of the This Diwali "Compared to last year, we have cut down the production by 50 per cent." "With the introduction of GST, we have incurred huge losses and we can't do anymore business as there is no gaurantee of this system," explained Mariappan, leader of Sivakasi Fireworks Association.

Many manufacturers find GST flawed as they state that the new tax system could not possibly work for the fireworks manufacturing sector. Small manufacturer who wished to remain anonymous said, "The economy in our industry is that we depend on the money from our buyers for the manufacturing of goods for the upcoming Diwali, every year."

"After introduction of GST and that too for an amount of 28 per cent, we went and met with the ministers pleading them to reduce it. When we met with the Finance Minister Jayakumar, he told us that his voice was not being heard in the council which was very disappointing."

Allegedly, GST also had frozen the money transaction procedure, leaving the buyers helpless for a certain period as well.
With not much hope, the factories went into production only three months before with only 50 per cent production as their mark.
"Previously we only paid 2 per cent as central tax, the remaining 12.5 per cent was paid by the buyer. But with us paying such a huge percentage, the price has also risen by 40 per cent which falls upon the consumer", explained Mariappan.

Sivakasi had also been under the scanner for a while after decisions by Madras High Court Madurai bench, leading to difficulty in attaining and retaining license.

"Unlike other industries where the goods are manufactured, stored and handed over, we have to attain licence for every step such as manufacturing, storing and transportation. Unable to follow up with new restrictions, already 300 manufacturers have locked down the factories", stated Mariappan.

"Atop of all such hurdles, bans like the one imposed by Supreme Court on selling and bursting cracker in Delhi has only made sure that we will not survive for long", stated Mariappan.