The implementation of the new tax regime has noted a drop in business by 25 per cent which had a cascading effect on the Indian handicraft industry. The classification of handicraft items has made the products expensive under various GST slabs of 5 per cent, 12 per cent, 18 per cent, and 28 per cent.

GST came as the second setback to the industry after demonetization. Before GST, some of the handicraft products were attracting just 5.5 per cent tax and the majority of products was tax-free. But after the implementation of GST, the handicraft industry witnessed a decline in business to Rs. 51.5 crores in 2016-17 from Rs. 54 crores in 2015-16. A further drop to Rs. 39.5 crores is expected in business this year.

“Higher tax rates have resulted in lower sales that led to an average monthly business decline from Rs. 4.3 crores to Rs. 3 crores,” G C Kishore Kumar, General Manager (Finance) of Karnataka State Handicraft Development Corporation Limited (KSHDCL) said.

The Karnataka Chief Minister has assured artisans to raise the issue at the GST Council Meet scheduled for November 9.

– Apparel and Textile News, Apparel Talk, Indian Apparel