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GST, demonetisation may impact wedding market growth: ASSOCHAM

Business News, Nation, (New Delhi), October 23:-Upcoming wedding season starting in November may be impacted by 10-15 per cent particularly wedding services like marriage garden, marriage hall booking, tent booking, confectionery services, photography and more, revealed by industry chamber Assocham.

The factors attributed are demonetisation together with Goods and Services Tax (GST) are likely to impact the upcoming wedding season in India as people will have to shell out more on buying jewellery and apparels, at salons and beauty parlours, photography, even for hiring venues like hotels, marriage palaces, courier and other related services, said the Assocham.

The GST rate on most of these services is from 18 to 28 per cent. Before GST, most of the wedding service businesses like tent services and confectionery booking were using unregistered bills on which they didn’t have to pay any tax, adds the paper. Destination wedding or the wedding tourism sector in India which accounts for less than 10 per cent share in the overall industry is not likely to face much adverse impact of GST and demonetisation as it is already a very costly affair which mainly lures foreigners, Non Resident Indian’s (NRI), rich and famous people for exotic weddings at beaches, royal palaces, adventurous places, said the Assocham paper.

However, all footwear above Rs 500 is taxed at a whopping 18 per cent. Tax on gold and diamond jewellery has increased from 1.6 per cent to 3 per cent. The booking for a 5-star hotel will cost 28 per cent extra in the form of GST. Also, event management service will have to pay an additional 18 per cent GST on the cost. GST on marriage garden and hall booking is also 18 per cent, same as most other wedding services.

Many people prefer to purchase wedding groceries and other items on due bills because of the unavailability of cash amount but under GST, the traders might not be willing to sell commodities with due bills.

As per the estimate, on average, a person in India spends one-fifth of their wealth on wedding functions. Facing an increase in the cost of several items required in Indian wedding, families are either revising their budget or looking to slash expenses to ensure they don’t exceed the original budget by a big margin.

In India, Goa is the most popular destination for Indian beach weddings and the palaces and forts of Rajasthan are also sought after, while Bali and Dubai are desirable spots for weddings overseas, added the Assocham findings.

Currently, the Indian wedding industry is about 1 trillion rupees and is growing at 25 to 30 per cent annually. The estimated cost of a wedding with no expenses spared could be between Rs 3 lakh to Rs 8 crore, in India, adds the paper. Everyone from those in entertainment to décor, beauty clinics, cosmetic giants, travel, tourism and even matrimonial web sites are making money out of marriages. Even foreigners, who want to solemnize their marriage in India, contribute to the Indian wedding industry.

Online portals like Shaadi.com, Bharat matrimonials and others rack up revenues of Rs 300-350 crore from match-making annually, and believe the business can only get bigger. There are wedding planners in the country who are ready to make all arrangements required in an Indian wedding, from beginning to end, for whopping charges, the report added.

-(NAV, Inputs: Agencies)

 

 

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