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28/07/2017 03:16pm

GST: Tax on Handicrafts; traditional industry fears closure

image GST: Tax on Handicrafts; traditional industry fears closure

New Delhi, July 28 (KNN) With the Goods and Services Tax (GST) almost completing its first month since implementation, the placing of handicrafts under the 12 per cent tax net has adversely impacted the handicraft industry that comprises primarily of the Micro, Small and Medium Enterprises (MSMEs).

Talking to KNN, Lalit Mahajan, President of the Bari Brahamana Industries Association explained the situation of the handicraft industry in Jammu and Kashmir.

The handicraft sector is considered as one of the traditional industry in the country. The industry enjoyed tax exemption since independence that allowed the sector to survive despite the machine made products taking over the market. But with the new tax reform in the country, the tiny and micro units involved in making handicrafts are on the verge of closure.

Majahan informed that the small units that made these products engaged a fair share of the population, therefore maintained employment.

“Interestingly the profit margin of the industry is not very high or big. With a GST introduced on these products, many units are already not functioning as it can’t afford to bear the tax rate” he added.

Similar concerns are shared by other handicraft manufacturers and traders from across the country.

Talking to KNN, Vani, a Kolu doll trader from Mylapore region of Chennai explained the situation in his sector.

The Kolu dolls are handmade dolls that are usually in demand during different festive seasons. Since the handicraft sector was exempted from taxes, the production of Kolu dolls continued till date. But the dolls are now being taxed.

Vani informed that the sales are already hit badly, the product that was for 1000 rupees has to be sold with an added tax cost and the customers aren’t willing to accept the new price.

With such situation prevailing, the decline in sales despite the upcoming festive season, is a cause of worry, says Vani. (KNN/ DA)

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