KCCI urges GST cut on Kashmiri Handicrafts ahead of GoM meeting
Srinagar, Aug 19: The Kashmir Chamber of Commerce and Industry (KCCI) has written to Union Finance Minister Nirmala Sitharaman ahead of the Group of Ministers (GoM) meeting scheduled on August 20, seeking a reduction in Goods and Services Tax (GST) on Kashmiri handicrafts from 12 percent to 5 percent.
In the letter, KCCI said the Centre’s proposed two-tier GST structure of 5 and 18 percent, along with a 40 percent special rate on select items, “provides an appropriate opportunity to address the concerns of the handicraft sector.” The Chamber has demanded parity for handmade Kashmiri products with handmade carpets, which currently attract only 5 percent GST.
Highlighting the scale of the sector, the Chamber said Kashmiri handicrafts employ over 3.8 lakh artisans, many of them women and from economically weaker backgrounds. Yet, despite their cultural and economic significance, the sector has suffered a steep decline, with exports falling from around Rs 1,700 crore a decade ago to just Rs 733 crore in 2024–25.
“The burden of a 12 percent GST is particularly harsh on products like Pashmina shawls, where nearly 85 percent of the cost comes from manual labour. Against raw material costs of about Rs 3,500, artisan work such as spinning, weaving, embroidery, dyeing, and finishing amounts to nearly Rs 8,600. Taxing such labour-intensive products at 12 percent raises prices, reduces competitiveness, and shifts demand toward machine-made imitations,” the letter noted.
The Chamber also reminded that the issue had been taken up earlier with Union Minister for Commerce and Industry Piyush Goyal during his recent visit to Kashmir, where he assured that the concerns of artisans would be conveyed to the Finance Ministry.
KCCI argued that reducing GST on handicrafts to 5 percent would provide relief to artisans, revive exports, generate rural employment, and help safeguard traditional skills that form part of India’s cultural heritage. “We sincerely hope that the Finance Minister and the GST Council will favourably consider this demand during the forthcoming deliberations,” the letter added.
