PHDCCI Kashmir opposes proposed GST hike on Kashmiri handicrafts

Srinagar, Dec 9: Chairman, PHDCCI Kashmir A P Vicky Shaw formally reached out to the PHDCCI Head Office, to advocate for the interests of the handicraft sector in light of proposed changes to the Goods and Services Tax (GST) structure.

A statement said that Shaw in a communication emphasises the urgent need to reconsider any potential GST hike on handicraft-based textile products in the upcoming 55th GST Council meeting that is scheduled for December 21, 2024

In the letter, the Chairman expressed profound concern regarding the implications of raising GST rates on handicraft textiles, which are currently taxed at 5% for items priced up to ₹1,000 and 12% for those above ₹10,000. The proposed increase to rates of 18% or 28% would have devastating effects on the livelihoods of artisans who rely on this sector for their income. Many artisans are already facing significant financial challenges, and such a hike would further jeopardize their stability.

The communication highlights that handicraft products are predominantly composed of artisan labour, accounting for approximately 80% of the total product cost, while only 20% is attributed to raw materials. This disproportionate cost structure means that an increase in GST effectively translates to a tax on the labour of artisans, exacerbating their precarious economic situation.

To address these concerns, the PHDCCI Kashmir proposes that all handicraft-based textile products be uniformly categorized under a single GST slab of 5%. This strategy would not only simplify the taxation process but also support artisans by increasing their wages and enhancing sales potential. Furthermore, it would incentivize traders to actively promote and invest in handicraft products, thereby fostering growth in this vital sector.

The Chairman reached out to the Textile Committee at Head office with a strong plea to the GST Council to reconsider any proposals that would increase the GST tax slab for handicraft-based textiles. Such actions would pose a severe threat to the livelihoods of countless artisans dedicated to preserving our rich cultural heritage.

PHDCCI Kashmir remains committed to advocating for the welfare of artisans and the sustainable growth of the handicraft sector. We urge all stakeholders to prioritize the interests of those who contribute so significantly to our cultural and economic landscape, the statement said.