logo   Mr. Kalmadi
festival

Finance Ministry Exempts Ganesh Mandals From 10.2% Service Tax


The Finance ministry sent out a notification on September 10, 2004 stating “Pandal/shamiana services provided for pure religious ceremonies or congregations, for example, for worship of Gods/Goddesses, are not liable to service tax”. Thus, the ministry has exempted thousands of pandal decorators from the 10.2% service tax during Ganesh festival. This simply means that pandal decorators, working on the ‘Sarvajanik Ganesh Mandals’, will be exempt from the 10.2% service tax introduced by finance minister P Chidambaram during the budget, this year. The notification, which is from the Central Board of Excise and Customs, could save these pandal decorators from coughing up anywhere between Rs 10,200-Rs 2,55,000, as service tax during Ganesh Utsav.

The finance ministry’s decision on these exemptions came early this month. The decision could be viewed as partial relief for decorators, who initiated a countrywide protest following the finance ministry’s decision to bring them under the tax net. Decorators claimed that an 10.2% service tax would spell doom for the industry and put a burden on the customers.

“Every year, Sarvajanik Ganesh Mandals spend anywhere between Rs 1 lakh-Rs 25 lakh on decorations for their pandals. The themes could range from issues as diverse as current affairs, politics and religious themes, to elaborate and ornate replicas of ancient monuments,” says HB Borhade, who works under renowned set designer Nitin Desai of ‘Lagaan’ fame. The pandal decorators usually go all out with their thematic embellishments during the Ganesh festival. “The costs associated with these decorations are very high. Not only do you have to bring raw materials from other states like Gujarat, but also have to pay high fees to artisans. The expenditure also includes extra additions such as sound and lights. The 10.2% service tax would only make it worse”, said a pandal decorator.

From The Economic Times - September 17, 2004 - By Gouri Shah
Pandal decorators manage service tax protection - The Economic Times

Login

Make a new account

Username:
Password:
submit story | create account | faq | search