Srinagar: The Kashmir Chamber of Commerce and Industry (KCCI) has appealed to Union Finance Minister Nirmala Sitharaman to lower the Goods and Services Tax (GST) on Kashmiri handicrafts from the current 12 percent to 5 percent. The Chamber has raised the issue ahead of the Group of Ministers (GoM) meeting scheduled for August 20, where tax restructuring is expected to be discussed.
In its representation, KCCI said 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 opportunity to address the concerns of Kashmir’s handicraft sector. It sought parity for handmade Kashmiri products with handmade carpets, which currently attract 5 percent GST.
Kashmiri handicrafts, one of the most labour-intensive industries in the region, employ more than 3.8 lakh artisans — many of them women and from economically weaker sections. Despite their cultural and economic value, exports have plummeted over the years, declining from around Rs 1,700 crore a decade ago to Rs 733 crore in 2024–25.
According to the Chamber, the 12 percent GST burden is particularly damaging for products like Pashmina shawls, where nearly 85 percent of the cost is attributed to manual labour. For example, while raw material may cost around Rs 3,500, artisan processes such as spinning, weaving, embroidery, dyeing, and finishing add nearly Rs 8,600 to the product. Taxing such high-value manual work, KCCI said, increases prices, reduces competitiveness, and pushes buyers toward machine-made imitations.
The Chamber also recalled that the issue was discussed with Union Commerce and Industry Minister Piyush Goyal during his recent Kashmir visit, where he assured that artisan concerns would be communicated to the Finance Ministry.
Emphasising the urgency, KCCI stated that reducing GST to 5 percent would ease the financial burden on artisans, help revive exports, generate rural employment, and safeguard centuries-old skills that form a vital part of India’s cultural heritage.
The Chamber expressed hope that the Finance Minister and the GST Council will take a favourable decision during the upcoming deliberations.