Handicrafts sales down 20% post GST implementation

By

Maverick Martins

Published
Dec 13, 2017

With Indian businesses successfully making the transition into the Goods and Services Tax (GST) regime, the handicraft sector continues to feel the brunt of heavy taxation imposed on the industry.
 

An industry which was given a leeway for many years with zero taxation is suddenly feeling the heat with a tax burden under GST. The sector under GST has come under different tax slabs, with 12 percent being the minimum and 28 percent maximum imposed on the sector.
 
As a result of this, the sales of handicraft products have plummeted by 20 percent which is leading to the closure of small medium enterprises in the country.

The handicraft industry has urged the government to withdraw the heavy taxes imposed on them fearing that the continuation of the GST tax will lead to closure of the Micro, Small and Medium Enterprises (MSMEs) in the country.
 
“Sales are down by 20% and SMEs are winding up their business. It is impossible to continue to be in the business with these tax rates. It is our prayer to exempt all handicraft items,” P Subramanian, president, Southern Handicrafts Industry Association said in a statement.
 
“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 added.
 
Last month, the Crafts Council of India had made a similar demand of a complete withdrawal of the new tax stating that over 9 crore weavers and artisans in the country were affected under the new tax regime.