Traders pray for GST exemption to handicrafts sector

Srinagar, May 03: As the Goods and Service Tax (GST) Council is set to discuss the law on May 4, the valley’s business community hopes for exemption of the handicraft sector.
Union Finance Minister Arun Jaitley would chair the 27th GST Council meet. State finance ministers would participate in the meeting through video conferencing to discuss simpler return form and the amendments required in the indirect tax regime rules.
Kashmir Chamber of Commerce and Industries (KCCI) President, Javed Ahmad Tenga, told The Kashmir Monitor that amendments were required in this law particularly for the handicrafts sector of Kashmir.
“We were trying to achieve exemption for the handicraft sector. We held a meeting and hope that this issue will be raised in the GST Council meeting by our Finance Minister to restore the dying sector,” he said.
Tenga said that post GST the handicraft sector suffered a setback, leaving the artisans to fend for themselves.
Currently a handmade shawl worth Rs 1,000 attracts five per cent tax, while the ones costing more than Rs 1,000 are levelled with 12 per cent GST.
“Almost 95 per cent of our shawls cost more than Rs 1,000, which means that we have to pay 12 per cent GST. We have not been able to sell or transport our goods due to the GST,” he said.
“Luxury items like Pashmina and carpets attract 12 per cent GST. Our customers are not ready to pay the taxes at the time of purchasing.”
Mushtaq Ahmad Wani, another businessman, claims that wood carving too has suffered under this law.
“It attracts 18 per cent GST. We are not able to transport our stocks to outside branches due to the GST. And whatever is there is not sold during the last one year. The tax should be revoked for certain sectors during the GST council meet,” he said.
Former Finance Minsiter, Haseeb A Drabu last year said the centre had agreed to exemption of small time handicraft traders and cutting down GST rate of walnut to five percent from 12 to five per cent.
The valley business community, however, claims that the taxes under this law are collected as per the previous rule.
The traders fear that the implementation of these two different taxes will leave the entire handicraft sector in peril.
“The sector, which provided succour to thousands of families in Kashmir, is now at the verge of extinction. Already, it has been facing multiple problems and now 18 per cent tax will be imposed on job works and 12 per cent on sales. The sector will face a slow death,” said Sheikh Ashiq, a member Carpet Export Promotion Council (CEPC).
He said the export of the handicraft products, especially carpet, has declined since July1 throughout the state.
“The traders have brought down their exports since July 1, when GST was implemented in entire India. The CEPC, in its findings based on the feedback received from various carpet manufacturers and exporters associations across India, has found that a huge number of carpet units have been inoperative in Kashmir,” he said.