GST on Garba! Why tax this Navratri event? Decryption of the new taxation

Navratri Garba performed during the nine days of Navratri to honor Goddess Ambe, is one of the most popular festivals in Gujarat. Thousands of people are flocking to the state to watch the event, which begins September 26 and ends October 5 this year. With the advent of the festival, many organizers have already opened their sales for the event. However, due to the introduction of GST, pass prices have increased. The GST exemption only applies to organizers charging less than Rs 500 per pass.

The Congress party demonstrated outside the tax collector’s office in Vadodara on Thursday August 4 to demand a rollback of the implementation of the Goods and Services Tax (GST). According to Jairam Ramesh, member of Rajya Sabha and opponent, the tax should be called Garba Samaapt (discontinue Garba) tax.

Why the government is promoting the Garba event

Navratri is a Gujarati word which literally means nine nights. In the state, the festivities are celebrated with rich Garba dances and various other rituals to honor and worship Goddess Ambe. During the festival, people can also worship a lamp made of earthen pots. This symbol of the power of the mother goddess is considered a symbol of new life.

The festival has been considered one of the most popular festivals in the state. It has also attracted tourists from various parts of the world. In 2003, the government of Gujarat organized the “Vibrant Navratri” in the city of Ahmedabad. This event, which began in the evening, was further considered an important part of the development of the state. During his tenure as the state’s chief minister, Narendra Modi called the event the longest dance festival in the world.

What is this new taxation and the fuss around?

Since the introduction of the GST in 2017, event organizers have for the first time been asked to charge a direct tax on entry tickets for the Garba event. The United Way of Baroda (UWB), the largest organizer of the event, opened registration last week. According to a notice posted on its website, registration fees have increased significantly. The men’s fees have risen to Rs 4,838, while the women’s fees have been set at Rs 1,298.

Central government officials, who inspected the city’s events in 2019, claimed that event organizers failed to comply with government-issued notifications regarding the implementation of GST on tickets. entered during its Garba events in 2017. Due to the pandemic, the state did not see large-scale festivities in 2020 and 2021.

While opposition parties have criticized the government for imposing a heavy tax on a religious event, leaders of the ruling Bharatiya Janata Party (BJP) have also reportedly responded to demands by organizers and attendees to exempt the event from the tax.

Minesh Patel, treasurer and trustee of UWB, told the Indian Express that passes or IDs issued for a fee or against an invoice would automatically make him liable for GST.

Mayank Patel of the Vadodara Navratri Festiva said organizers would not pass the GST burden on attendees as they contribute to the police welfare fund. However, they would pay the 18% tax on ticket sales from their earnings. He also noted that entry tickets for men cost around 1,000 rupees and above.

What are the GST rules for entertainment/commercial events?

A senior official from the GST department of Gujarat said that no changes have been made regarding the implementation of GST on Garba. During the pre-TPS period, service tax was charged on event entry tickets if the total amount charged for admission exceeded Rs 500. There were also embedded taxes due to VAT credit which was not available for service charge payment.

According to the official, the tax rate of 18% on the entrance ticket of a Garba or an event is still applicable if the total amount paid for admission exceeds Rs 500. This means that the rate of taxation under the new regime has not changed. In June 2017, the government had notified that the entrance ticket for a certain event would be liable to an 18% tax if the total amount exceeded Rs 500.

Why hasn’t the GST been collected for the past four years?

The UWB said the Garba event was not considered an entertainment event under GST. Instead, he focused on providing various services to the public, such as food stalls and setting up multiple structures. Hemant Shah, the chairman of the UWB’s resource development committee, said the organization pays the tax on services provided by vendors, but money collected from passes goes to a charitable cause. He added that the donations received from the passes are used to finance the activities of the UWB, which is an NGO. Every penny the organization saves through the sale of passes goes to the poor and vulnerable.

Why is Garba considered a commercial event by the government?

Usually, commercial Garbas are hosted by organizations or clubs, such as UWB. These types of events usually have entry passes which are priced around Rs 1,000 and above. In major cities, the prices of these passes vary according to the type of event. According to the organizers, the annual income generated by the events is around Rs 7,000 cr. This includes the profits large business enterprises make from the event, as well as the various allied businesses associated with it, such as food vendors, sound systems, and decorators.

Along with the grand prizes offered at the end of the nine-night event, shopping venues also offer various prizes, such as two-wheelers and four-wheelers. While large commercial enterprises have the equipment and resources to organize the events, the smaller, community-based Sheri Garbas are usually organized by local residents.

Thousands of people gather at different places in a Garba to dance to the music of Gujarati folk songs. UWB’s biggest event is usually held in the city of Vadodara. It has around 30,000 participants at any given time and 15,000 viewers.

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