With GST, musical instruments to cost more

BENGALURU: Musicians and store owners are raising a din about the 28 per cent goods and services tax (GST) on musical instruments and the lack of clarity on what instruments the new tax applies to.

“Earlier, musical instruments in Karnataka were taxed at 14.5 per cent and Indian-made instruments at 5.5 per cent, “said Siddharth Patwa, director of music store chain Soundglitz.” Abroad, music is considered to be educational. Putting a tax of 28 per cent on instruments makes pursuing music a luxury .”

While the post-GST price increase may not be very high, stores are al ready feeling the impact. “Raising the tax has affected entry level products for budding musicians and new learners. A hike of Rs 300-500 in fast-moving instruments like guitars and keyboards has led to a drop in sales definitely,” said Jason Prasanna Raj, manager at Traegen Systems that runs a franchise for Yamaha Music Store in HBR Layout.

The store’s sales have dropped by about 60 per cent since GST was introduced on July 1, Raj said. “As the margins have become very small for retailers, it’s becoming difficult to offer any discounts to customers.”

Ritwik Burman, administration manager at musical instruments dealer Reynolds Inc, said discounts to customers have dropped to about 5 per cent from 12-15 per cent earlier.

Beatboxer and singer Vineeth Vincent feels discouraged by the higher tax. “As soon as one sees a 28 per cent tax, it becomes a deterrent,” he said. “Music is a way of life and has helped me make a living. But I struggle to afford a good guitar, a mike or an amplifier. Now it’s become even more difficult.”

If the government wants to empower local businesses and artistes it should make music affordable, he said. “A lot of people end up buying spare parts or musical instruments from abroad because they are very expensive in India. This (28 per cent GST) actually makes businesses lose money.”

There’s also the issue of classification of the instruments. Under GST, handcrafted indigenous musical instruments are exempt from tax.But guitars and violins, even if made in India, fall under the gambit of western instruments. This is “leading to a lot of confusion,” said Patwa.

Tax consultant Narasimhan Elangovan, however, expects the prices to normalise and maybe even drop after a few months when there’s more clarity on the new tax rules.

“With GST coming in, businesses will have to change their filing process. And once new imports begin, prices will be regularised due to the reduced import duties,” he said.