Mysuru: The Government’s move to levy any tax on handicrafts is not a wise decision. Such products are not to be considered and treated as commercial goods. However, if the tax has to be implemented under Goods and Services Tax (GST), then a 5 percent tax on all the goods, irrespective of HSN codes may be levied, urged the Southern Handicrafts Industry Association, Chennai and Karnataka State Handicrafts Manufacturers Association members.

P. Subramanian, President of Southern Handicrafts Industry Association, Chennai, addressing a press conference yesterday at a private hotel in Bamboo Bazaar, spoke on the issues confronting the handicraft manufacturers in the country and especially in South India.

“The Government of India has exempted Excise Duty for handicrafts all these years as a support for the traditional arts to survive. But the levy of exorbitant GST of 28 percent is contrary to the policy. The industry is forced to face the impact of exorbitant impracticable tax rate of 28 percent, 18 percent and 12 percent under the GST Act under different HSN codes,” he said.

Subramanian said that most of the handicraft products are traditional arts reflecting the heritage carried forward from several centuries, which were developed by the Emperors and Kings, the then rulers of our country.  

He pointed out that prior to introduction of the GST, more than 15 States in the country had exempted tax under VAT (Value Added Tax) for handicrafts and a minimum of 5 percent VAT was levied. “However, it is unfortunate that the learned GST Council had ignored the support extended for handicrafts by majority of the State and penalised the handicrafts industry with ruthless rates of GST,” he regretted.

According to Subramanian, handicraft is a non-essential commodity and its survival and growth is depending on spending capacity and the liking of the domestic consumer.

More than 1.75 crore people in the country are involved in the cottage handicrafts industry. It is considered as the third largest one after agriculture and handloom textiles in the non-formal sector. Majority of these people are artisans in villages and many of them are even physically challenged who depend on handicrafts for their livelihood, he said.

“Nearly 40 percent of handicrafts are being exported by which a sizeable foreign exchange is being earned. The rest of the production is being consumed by the domestic market,” he said.

Subramanian appealed to the GST Council to save this cottage industry as well as the traditional arts from being ruined by levying a minimum of 5 percent GST on all handicrafts under one head irrespective of HSN codes.

Southern Handicrafts Industry Association Secretary Shyam, Karnataka State Handicrafts Manufacturers Association Honorary President P. Gowraiah, President S. Ramu, Vice-President Syed Muktar Ahmed and General Secretary Syed Ismail were present during the press conference.