GST, demonetization may impact wedding season: ASSOCHAM report
The Indian economy has slowed down on the back of demonetization and GST. But now that the wedding season is about to start, the ramifications will likely appear with full force. According to a report by ASSOCHAM, this year's season might be impacted by up to 15%. One reason is that people will have to shell out more for pretty much everything this time.
Here's how costlier wedding services will be this time
Here are the figures: post GST, tax on many services like tent booking, photography and salon services range from 18% to 28%. Earlier, many were being conducted through unregistered bills, thus no taxes. Tax on gold and diamond jewelry is up from 1.6% to 3%. Booking a hall/garden/five-star hotel will cost 28% extra. There will be an additional 18% cost on event management services.
But destination weddings not to be affected
Destination weddings, generally very costly affairs, only attract a certain class - mostly foreigners, NRIs, the rich and famous - and account for 10% of the overall wedding industry. As such, increased tax rates under GST are unlikely to affect this sector.
The last wedding season too went by quietly
The last wedding season came right after PM Narendra Modi suddenly announced the demonetization of Rs. 1,000 and 500 notes. Cash withdrawal limits from banks as well as ATMs were strictly capped. Exemption of Rs. 2.5L for to-be-married families didn't provide much relief. Many people postponed or called off plans. The industry staggered. Several traders reported business going down by up to 80%.
The reach of India's wedding industry needs to be sustained
According to ASSOCHAM, a single wedding, with no expenses spared, could cost from Rs. 3L to Rs. 8cr. Thanks to such expenses, the Indian wedding industry is worth around $1tn and is growing 25-30% annually. Foreigners, who often travel to India for destination weddings, contribute a significant proportion of this income. Two dull seasons might leave the industry struggling for a long time.