The introduction of (Goods and Services Tax) GST has hit the handicrafts sector hard. The industry, which was exempt from taxes in more than 15 states and was paying 5% VAT (value added tax) in eight states, has been brought under the 12% and 18% tax slabs under GST.
“After introduction of the new tax regime, handicrafts industry has been badly affected. Sales are down by 20% and SMEs are winding up their business,” said P Subramanian, President, Southern Handicrafts Industry Association. “It is impossible to continue to be in the business with these tax rates,” he said. “Most of the handicraft products are traditional arts reflecting our cultural heritage carried forward from several centuries,” Subramanian stated.
While the GST on furniture made out of bamboo/cane has been reduced to 12% from 18%, the rates on finished leather and coir products have been brought down to 5%, he said. “It is our prayer to exempt all handicraft items. If the GST council is unable to consider our request, we request a minimum GST of 5% for all handicrafts under one head irrespective of HSN (harmonised system of nomenclature) codes,” Subramanian said.