The Biz Reporter
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 for August 20, pressing for a reduction of Goods and Services Tax (GST) on Kashmiri handicrafts from the current 12 percent to 5 percent.
The Chamber said that the Centre’s proposed two-tier GST structure of 5 and 18 percent, along with a 40 percent special rate on select items, offers an appropriate opportunity to address the long-standing concerns of the handicraft sector. KCCI has sought parity for handmade Kashmiri products with handmade carpets, which already attract 5 percent GST.
Kashmiri handicrafts, one of the most labour-intensive industries in the region, employ over 3.8 lakh artisans, many of them women and belonging to economically weaker sections. Despite their cultural and economic importance, the sector has been in decline, with exports falling from around Rs 1,700 crore a decade ago to Rs 733 crore in 2024–25.
According to KCCI, the burden of a 12 percent GST is especially harsh on products like Pashmina shawls, where nearly 85 percent of the cost is attributed to manual labour. For instance, against raw material costs of around Rs 3,500, artisan work including spinning, weaving, embroidery, dyeing, and finishing adds up to nearly Rs 8,600. Imposing 12 percent GST on such labour-intensive products inflates prices, reduces competitiveness, and shifts demand toward cheaper, machine-made imitations.
The Chamber recalled that this issue was also raised with Union Minister for Commerce and Industry Piyush Goyal during his recent visit to Kashmir on July 8, where he acknowledged the concerns of the artisan community and assured that the matter would be conveyed to the Finance Ministry.
KCCI emphasised that lowering GST on Kashmiri handicrafts to 5 percent would ease the financial burden on artisans, help revive exports, generate rural employment, and safeguard traditional skills that are integral to India’s cultural heritage. The Chamber expressed hope that the Finance Minister and the GST Council would take a favourable decision in the upcoming deliberations.
