From hotels to handicrafts, J&K welcomes sweeping GST relief

Srinagar, Sep 4: Jammu and Kashmir’s trade and industry bodies have welcomed the sweeping reforms announced by the Goods and Services Tax (GST) Council, including the reduction of GST on handicrafts from 12% to 5%, relief for the hotel sector, and the simplification of slabs into a two-tier structure. They said the measures would ease compliance, provide relief to artisans and small traders, and stimulate economic activity in the region.

KCCI terms it a positive step

The Kashmir Chamber of Commerce and Industry (KCC&I) has welcomed the decisions taken in the GST Council meeting held on Wednesday, particularly the reduction of GST rates on common-use items, handicrafts, and hotel rooms.

The Chamber described the move as a positive step, especially for the Kashmir region which has been facing economic challenges. President KCC&I, Javid Ahmad Tenga, while reacting to the development, said:

“This is indeed a landmark decision and a matter of great relief for us. The Kashmir Chamber of Commerce and Industry has consistently advocated for the reduction of GST on handicrafts and other essential items, as higher taxation has proven detrimental to our economy. We had raised this issue with the Hon’ble Union Minister of Commerce and Industry, Piyush Goyal, during our interaction with him at SKICC in July. We later submitted a detailed representation to the Hon’ble Union Finance Minister Nirmala Sitharaman, seeking a reduction of GST rates from 12 percent to 5 percent. Yesterday’s approval by the GST Council is, therefore, the fulfilment of a long-pending demand which the Chamber has been pursuing with utmost sincerity and persistence.”

President Javid Tenga further said, “The handicraft sector of Kashmir is unique and labour-intensive, employing lakhs of artisans, weavers and craftsmen, many of whom come from economically weaker sections. A reduction in GST will directly benefit them by making their products more competitive in both national and international markets. This decision not only safeguards our cultural heritage but also provides livelihood security to families dependent on this sector. We hope that with this relief, the handicraft industry will regain momentum and contribute meaningfully to the overall economy of Jammu and Kashmir.”

KCCI highlighted that guests of budget and mid-market hotels will benefit the most from the government’s decision to reduce GST on rooms costing up to Rs 7,500, with rates being lowered from 12% with input tax credit (ITC) claims to 5% without ITC, effective September 22. It also welcomed the Council’s move to reduce four slabs into two (5% and 18%), along with a 40% slab on select luxury goods.

JKHARA welcomes relief for hotel industry

The Jammu and Kashmir Hotel and Restaurant Association (JKHARA) has warmly welcomed the GST Council’s decision to reduce the GST on hotel rooms priced up to Rs 7,500 from 12% to 5%, and on handicrafts from 12% to 5%, calling it a major relief for both the hospitality and cultural sectors of the region.

President JKHARA, Babar Chowdhary, said the reform would provide a much-needed boost to the tourism-driven hotel industry in Kashmir. “This decision will make mid-segment hotels more affordable for tourists, which in turn will support the revival of our tourism industry after years of setbacks due to unrest, natural calamities, and the pandemic. With lower taxation, our hotels will be able to attract more domestic travellers as well as international tourists who often find Kashmir comparatively expensive when stacked against competing destinations.”

Chowdhary noted that the hotel industry is one of the largest employers in the Valley, sustaining not only hoteliers but also workers in transport, food supply chains, and handicraft markets. “Every tourist who stays in a hotel is also a potential customer for handicrafts, restaurants, transporters and local markets. By making accommodation affordable, this GST cut will create a multiplier effect across the tourism economy of J&K. This step has come at the right time when the tourism sector is gradually picking up pace and needs a strong policy push to regain its lost momentum.”

Welcoming the reduction of GST on handicrafts, Chowdhary said the linkage between handicrafts and tourism is undeniable. “Visitors to Kashmir are not just drawn by our scenic beauty but also by our unique cultural products — Pashmina shawls, carpets, woodwork, Paper Machie, Sozni embroidery. By reducing GST from 12% to 5%, the government has not only given artisans breathing space but also encouraged tourists to spend more on local crafts. This will directly benefit thousands of artisans and shopkeepers whose livelihoods depend on tourism inflow.”

KTMF welcomes simplified GST structure

The Kashmir Traders and Manufacturers Federation (KTMF) also welcomed the reforms, particularly the simplification of the GST structure. KTMF President Mohammad Yaseen Khan said the decision to adopt two slabs would “reduce unnecessary complications, make compliance easier, and bring relief to small-time traders, shopkeepers and MSMEs.”

Khan added that the multi-slab GST regime had long remained a hurdle for small and medium businesses in J&K. “A simplified tax system means less confusion, fewer disputes, and more time for traders to focus on their businesses rather than paperwork. By rationalising the slabs, the government is not only giving traders breathing space but is also helping stabilise consumer prices in the market.”

At the same time, Khan urged the government to go further: “A simplified GST will help traders, but a complete waiver on handicrafts is essential to protect our culture and empower our artisans.”

PHDCCI hails relief for handicrafts, MSMEs

PHD Chamber of Commerce and Industry (PHDCCI) Kashmir Chairman A P Vicky Shaw described the GST rationalisation as a “landmark boost” for both the economy and the handicraft sector. He welcomed the reduction of GST on handicrafts to 5%, calling it a decisive move that would “encourage the nation’s talented craftspeople and artisans.”

“Traditional sectors such as Pashmina, carpet weaving, Sozni embroidery, Paper Machie and wood carving have long awaited this support. The reduced tax burden will enhance their competitiveness and preserve our cherished cultural heritage,” Shaw said.

He added that the simplification of slabs to 5% and 18% was a “masterstroke” for ease of doing business, especially for MSMEs. *“It will simplify refunds, compliance and filing, reduce litigation and finally give both businesses and consumers the predictability they need,”* he said, adding that lowering rates on everyday items and inputs would bring relief to families and create the foundation for long-term growth.

ICC Jammu flags revenue concerns

The Indian Chamber of Commerce (ICC) Jammu also welcomed the reforms, with its Chairman Rahul Sahai describing them as “progressive and timely.” He said the rate cuts would lower the prices of medicines, daily-use items, televisions, cars and festive products, giving relief to consumers.

“With Diwali approaching, this is indeed a very good and people-friendly step by the Government of India,” Sahai said.

At the same time, he raised concerns about J&K’s fiscal health. “The UT may face an estimated revenue loss of around Rs 1,000 crore annually as a result of these reforms. J&K is already a revenue-deficient state, and this reduction may further widen the gap. However, we remain hopeful that increased consumption will help bridge the shortfall and bring us closer to last year’s figures.”

Calling the reforms “balanced and positive,” he said that cheaper medicines and essentials would provide immediate relief while supporting long-term recovery.