KCCI writes to Nirmala Sitharaman ahead of GoM meeting

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 on August 20, pressing for the reduction of Goods and Services Tax (GST) on Kashmiri handicrafts from the current 12 percent to 5 percent.According to a statement issued here, 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, provides an appropriate opportunity to address the concerns of the handicraft sector. KCCI has sought parity for handmade Kashmiri products with handmade carpets, which attract 5 percent GST. Kashmiri handicrafts are among the most labour-intensive sectors of the region, employing over 3.8 lakh artisans, many of whom are women and from economically weaker backgrounds. Despite their cultural and economic significance, the sector has suffered a steep decline, with exports falling from around Rs 1,700 crore a decade ago to Rs 733 crore in 2024–25.KCCI explained that the burden of a 12 percent GST is particularly harsh on products like Pashmina shawls, where nearly 85 percent of the cost comes from manual labour. For instance, against raw material costs of about Rs 3,500, artisan work such as spinning, weaving, embroidery, dyeing, and finishing amounts to nearly Rs 8,600. Taxing such labour-intensive products at 12 percent raises prices, reduces competitiveness, and shifts demand toward machine-made imitations.The Chamber reminded that the matter was also taken up with Union Minister for Commerce and Industry Piyush Goyal during his recent visit to Kashmir, where he assured that the concerns of artisans would be conveyed to the Finance Ministry.KCCI emphasised that bringing GST on Kashmiri handicrafts down to 5 percent would provide relief to artisans, revive exports, generate rural employment, and preserve traditional skills that form part of India’s cultural heritage. The Chamber expressed hope that the Finance Minister and the GST Council would favourably consider this demand during the forthcoming deliberations.